Schultze, et al. v. Chandler, Sr., et al.

Plaintiffs commenced this action against their attorney and his law firm in state court for legal malpractice, alleging that the attorney was negligent in the performance of his duties as counsel to the unsecured creditors' committee. At issue was whether the bankruptcy court properly exercised jurisdiction over the malpractice action for the committee and correctly dismissed the claim. The court concluded that the district court properly concluded that the bankruptcy court had jurisdiction over the removed legal malpractice action because it was a core proceeding. In this case, the employment of the attorney was approved by the bankruptcy court and was governed by 11 U.S.C. 1103; the attorney's duties pertained solely to the administration of the bankruptcy estate; and the claim asserted by plaintiffs was based solely on acts that occurred in the administration of the estate. The court also concluded that the district court correctly concluded that the bankruptcy court did not err in dismissing the complaint because the attorney did not owe an individual duty of care. Therefore, the court affirmed the district court's dismissal of the case on the merits. View "Schultze, et al. v. Chandler, Sr., et al." on Justia Law