In 2008, the Fifth Circuit Court of Appeals decided the case of Dynasty Oil & Gas, LLC v. Citizens Bank (In re United Operating, LLC), 540 F.3d 351 (5th Cir. 2008), wherein the court considered whether a chapter 11 plan had reserved the right of the debtor to pursue claims and causes of action against the defendants after confirmation of the plan. The Fifth Circuit held that to properly retain claims and causes of action, the plan must be “specific and unequivocal” in retaining the right to pursue claims post-confirmation. Id. at 355. The court of appeals rejected the argument that the general language contained in the plan reserving the right to pursue “any and all claims” was sufficiently “specific and unequivocal” to reserve the debtor’s right to pursue claims arising under state law against the defendants. Id. at 356. While announcing a new standard for determining whether a party would have standing to pursue claims post-confirmation, the Fifth Circuit did not establish a definitive application for the standard that could be used by lower courts. Effectively, lower courts were given a phrase “specific and unequivocal” with little substance or meaning.
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