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Husband and wife lack standing to pursue recovery after bankruptcy assignment

Krzysztof and Ewa Obrzut sued the Polish Deli & Bakery in 2003 and settled their claim in 2005 through an agreement that required the defendants to pursue litigation over insurance coverage.  The Obrzuts woud be entitled to share in any recovery.  Subsequently, the Obrzuts filed for bankruptcy protection and the Trustee was paid the Obrzut's share of the insurance recovery achieved by the Deli.  The Obrzuts argued that the Deli failed to pursue and collect all of the insurance proceeds it was entitled to collect and filed a subsequent suit to enforce the 2005 settlement agreement.  The Court held that the Obrzuts' claim now belonged to the Bankruptcy Court and that the Obrzuts lacked "standing" to pursue it.
Thompson O’Neil, P.C.
309 East Front Street
Traverse City, Michigan 49684
Toll Free: 1-800-678-1307
Fax: 231-929-7262