Hill v. Gibson, Dunn & Crutcher, LLP (In re MS55, Inc.), provides a new tool in the bankruptcy litigator's toolbox for dealing with the in pari delicto doctrine in bankruptcy-related litigation. The court embraced an expansive interpretation of Section 544(a) of the Bankruptcy Code and allowed a chapter 7 trustee to proceed against the debtors' former counsel by stepping into the shoes of a hypothetical creditor rather than of the debtor's bankruptcy estate (which arguably was barred by the in pari delicto doctrine from bringing actions against counsel). To the extent this broader interpretation is adopted in other jurisdictions, third party defendants (such as lenders and professionals) formerly shielded from estate claims based on the debtor's participation in the alleged wrong may find themselves forced to defend their actions. Jeremy B. Coffey analyzes the decision.

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