Grey
Grey v. Federated Group, Inc. (In re Federated Group, Inc.)
Opinion
Lead Opinion
Wiggins, J.
We must decide whether the joinder of an indenture trustee to an involuntary bankruptcy petition extinguishes the claims of the underlying debenture holders for purposes of satisfying the three petitioning creditor requirement of 11 U.S.C. § 303 (b). Because we conclude that it does not, we reverse.
BACKGROUND
The Federated Group, Inc. issued convertible subordinated debentures due in the year 2019. Bank of America is the indenture trustee for these debentures. The appellants own Federated debentures. Nathaniel Grey owns ten debentures he purchased in September 1989. Bernard Heerey owns 100 debentures he purchased in January 1990. Lana Grey (Nathaniel’s wife) owns two debentures she purchased in February 1990. Finally, Harlene and Jay Pine own two debentures they purchased from Nathaniel Grey acting as trustee for a Grey family trust in February 1991.
On January 23, 1992, Nathaniel Grey, Heerey, and the Pines filed an involuntary bankruptcy petition against Federated. Lana Grey joined the petition on March 23, 1992. On July 29, 1994, after various proceedings not relevant to this appeal, the bankruptcy court issued a decision on Federated’s motion to dismiss. The bankruptcy…