Ltc of William Del Biaggio III v. David Freeman

A provision of the Bankruptcy Code requires that damages claims arising from the purchase or sale of the security óf a debtor be subordinated to other claims senior to or equal to it. We must decide whether such treatment applies where the debtor is an individual.

I

A

The Nashville Predators are a National Hockey League (“NHL”) team in Nashville, Tennessee. As of 2007, the Predators were owned by Craig Leipold and his family. During that year, however, David Freeman learned that Leipold intended to sell the team to a third party who wanted to move the Predators to another state. As a result, Freeman began organizing a group of Nashville investors to buy the team. Leipold talked' with Freeman about purchasing the Predators, but was also in conversation with other potential buyers, including William Del Biaggio, III. Eventually, Leipold and the NHL Commissioner suggested to Freeman that his group of investors join forces with Del Biaggio to make a joint bid to buy the team. In so suggesting, Leipold related previous assertions made to him by Del Biaggio that stressed Del Biaggio’s ability to fund the purchase and his experience with professional hockey.

During the…