Official Committee of Talc Claimants v. Whittaker, Clark & Daniels Inc, et al.

Section 541(a)(1) of the Bankruptcy Code defines “property of the estate” to include “all legal or equitable interests of the debtor in property as of the commencement of the case.” 11 U.S.C. § 541(a)(1). “Property interests,” in turn, “are created and defined by state law.” Butner v. United States, 440 U.S. 48, 55 (1979). Accordingly, eight courts of appeals to consider the question have held that state law determines whether a creditor’s cause of action against a nondebtor third party is a property interest of the debtor and thus constitutes “property of the estate.” In this case, the Third Circuit refused to consider state law—and indeed, held that consideration of state law was “not necessary”—when it concluded that certain creditors’ claims were property of the bankruptcy estate. Pet. App. 39a n.21. The question presented is: Whether a creditor’s claim against a nondebtor third party can be “property of the estate” under 11 U.S.C. § 541(a)(1) when, before the bankruptcy, the debtor could not have asserted the claim on its own behalf under governing state law.