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Legal Update

US Third Circuit Further Defines Bankruptcy Courts’ Ability to Enjoin Actions Between Non-Debtor Affiliates and Third Parties

11 March 2010
Mayer Brown Legal Update
In a decision that reaffirms its previous rulings on the jurisdictional limits of bankruptcy courts, the US Court of Appeals for the Third Circuit recently held in W.R. Grace & Co. v. Chakarian (In re W.R. Grace & Co.)1 that bankruptcy courts lack subject matter jurisdiction over third-party actions against non-debtors if such actions could affect a debtor’s bankruptcy estate only following the filing of another lawsuit.


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