Matrix IV, Inc. v. American Nat’l Bank, No. 08-3917, 2011 BL 196599 (7th Cir. July 28, 2011) The United States Court of Appeals for the Seventh Circuit affirmed a district court’s dismissal of a creditor’s RICO and fraud claims against a lender and an insider company of the debtor, holding that the claims were barred by collateral estoppel because they had been previously litigated in the debtor’s bankruptcy. While ultimately deciding the issue on collateral estoppel grounds, the Seventh Circuit’s decision is notable in its discussion of the Supreme Court’s recent decision in Stern v. Marshall, 131 S.Ct. 2594 (2011), and its suggestion that the decision may affect a lop-sided split of authority among the circuit courts regarding whether a core ruling in a bankruptcy suit is res judicata as to noncore claims.
Bankruptcy Court Rejects Matrix’s Fraud and Equitable Subordination Claims
District Court Dismisses Matrix’s RICO and Common Law Fraud Claims
Doctrines of Collateral Estoppel and Res Judicata
Seventh Circuit Rules Matrix’s RICO Action Was Barred by Collateral Estoppel
Affect of the Supreme Court’s Recent Ruling in Stern
Seventh Circuit Affirms District Court’s Decision
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