District Court Affirms Bankruptcy Court’s Dismissal of $300 Million Adversary Complaint

In September 2020, the Bankruptcy Court for the District of Arizona dismissed a lawsuit that was brought by the debtor against CDQ’s client, the primary creditor in the bankruptcy.  The debtor alleged that CDQ’s client and several of its principals wrongfully and in bad faith sought a declaratory judgment to invalidate a real estate contract between the parties in a prior litigation, despite the reality that CDQ’s client won a multi-million dollar judgment against the debtor in that same litigation.   The debtor sought over $300 million in alleged damages. The Bankruptcy Court held that because the debtor did not disclose or otherwise preserve the claim, it was barred by the confirmed bankruptcy plan.  The debtor appealed the dismissal to the District Court, and on October 19, 2021, District Court Judge John Tuchi affirmed the dismissal.  Congratulations to Dan Dowd, Dan Durchslag, and Rebecca van Doren, who handled the litigation and appeal.