Direct vs Derivative Injuries Determine Bankruptcy Court’s Jurisdiction Over Tortious Interference Claim

For eight years Curtis Burton served as CEO of Buccaneer Resources LLC, an oil exploration and production company. By 2014, Buccaneer’s secured creditor, Meridian Capital CIS Fund held all of Buccaneer’s senior debt. Just before Buccaneer filed for bankruptcy in May 2014, it terminated Burton which he claims was a violation of his contract. Burton also claims Meridian forced Buccaneer to fire him and filed a claim alleging tortious interference with a contract. By this time Buccaneer had filed bankruptcy and eventually settled with Meridian. Meridian claimed Burton’s case belonged in the bankruptcy court which it had already settled. Burton disagreed and filed the claim in state court. The Fifth Circuit agreed with Burton, the claim belonged in state court because Burton suffered harm outside of the bankruptcy filing. Read the entire case here.