Bankruptcy Judge Robert Gerber yesterday partly upheld efforts by creditors of the former Lyondell Chemical Co. to reclaim money from its shareholders, in a ruling that could help resolve the murky issue of how far shareholder protections extend when companies go bankrupt, Reuters reported yesterday. Judge Gerber dismissed one fraud claim against shareholders in the $6.3 billion lawsuit, but allowed another one to proceed. He also said that the creditors, who are represented by a trust, could replead the dismissed count, keeping the lawsuit alive. More critically, Gerber's decision denied a portion of the shareholders' bid to dismiss the lawsuit in which they argued that "safe harbor" protections afforded to shareholders under bankruptcy laws also apply under state laws.
