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socrateaser
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 38560
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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I lost a civil action in federal court with a judgment of

Customer Question

I lost a civil action in federal court with a judgment of several million dollars. The judge recently ordered a new trial under rule 59.
In the interim of the judgement I was forced to file a bankruptcy . My life was turned inside out . Have not been able to work and my reputation has been significantly tarnished.
I would like to begin preparing for a claim against the federal government as well as the acting trustee in the matter for aggressively treating me like a criminal , seizing all my assets and spending significant dollars on himself and his associate firm.
what grounds do i have as recourse.
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 1 year ago.

Hello,

Suing a bankruptcy trustee is a very difficult legal issue, with a great deal of conflicting legal opinion. The following explanation is taken from In re Hussain, No. 10-2103 (GEB). (D.N.J. Dec 07, 2010).

Although some courts have held that a bankruptcy trustee is only personally liable for "willful" violations of his fiduciary duties, see Hutchinson v. McGee, 5 F.3d 750, 752-53 (4th Cir. 1993), the majority of courts have held that a trustee may be held personally liable for a breach of his fiduciary duties via surcharge by the bankruptcy court if his or her conduct is no more than negligent. See Red Carpet Corp. of Panama City Beach v. Miller, 708 F.2d 1576, 1578 (11th Cir. 1983); In re Cochise College Park, Inc., 703 F.2d 1339, 1357 (9th Cir. 1983); Ford Motor Credit Co. v. Weaver, 680 F.2d 451, 461 (6th Cir. 1982); Sherr v. Winkler, 552 F.2d 1367, 1374 (10th Cir. 1977); In re Sturm, 121 B.R. 443, 448 (Bankr. E.D. Pa. 1990). Case law in the Third Circuit alludes to the fact that a trustee would be held personally liable for negligence in his fiduciary duties. See In re Prindible, 115 F.2d 21 (3d Cir. 1940); Lambertville Rubber Co. v. Crowley, 111 F.2d 45 (3d Cir. 1940). See also Tennsco Corp. v. Estey Metal Prods., 200 B.R. 542, 544-545 (D.N.J. 1996) (holding that while a bankruptcy trustee may be held personally liable for a breach of fiduciary duty to the estate, when dealing with trustee liability to non-parties, there is a strong public policy in protecting bankruptcy trustees for unintentional tortious acts).

One point is established beyond dispute: Absolute judicial immunity extends to bankruptcy trustees because "their duties and functions are `an integral part of the judicial process.'" Id. at 423 (quoting Lonneker Farms, Inc. v. Klobucher, 804 F.2d 1096, 1097 (9th Cir. 1986)). Because of this rule, a person who tries to sue a bankruptcy trustee must obtain permission of the court, before the lawsuit can go forward.

Concerning legal action against the United States, I don't know enough about the underlying case to be able to determine if you can avoid the government's sovereign immunity. If you want to explain the case here, feel free. If you would prefer a confidential relationship, I will send you an additional services offer, and you can accept or decline at your convenience.

I hope I've answered your question. Please let me know if you require further clarification. And, please provide a positive feedback rating for my answer -- otherwise, I receive nothing for my efforts in your behalf.

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