Second Circuit – Bankruptcy proceedings: Ryniker v. Sumec Textile Co.

United States Court of Appeals for the Second Circuit

 Bankruptcy proceedings — Agent and subagents — Service of process

Ryniker v. Sumec Textile Co.

24-2090

Judges Kearse, Jacobs, and Lohier

Background: The plaintiff appealed from the grant of the defendant creditor’s motion to dismiss the proceeding brought by the plaintiff bankruptcy litigation administrator to recover preferential payments made by the bankruptcy debtors to the creditor in the 90-day period before the debtors filed for bankruptcy. The plaintiff seeks reinstatement of a prior default judgment, contending that the district court erred in ruling that the subagent served lacked authority to accept service of process on behalf of the creditor.

Ruling: The Second Circuit vacated and remanded. The court held that the documents in the record established that the creditor conferred authority on an agent and subagent to file its proof of claim and to do all that was appropriate in order to collect from the debtors, and thereby, implicitly authorize the agent and subagent to do all that was appropriate to resist the administrator’s reduction of the sum as could occur in a bankruptcy adversary proceeding.

Visuvanathan Rudrakumaran for the petitioner; Stefanie Notarino Hennes, of the U.S. Department of Justice, for the respondent.

Oral argument audio