SANDERS CONFECTIONERY PRODUCTS, INC., a Michigan corporation; JOHN M. SANDERS; FILIPP J. KREISSL, Plaintiffs-Appellants (90-2039), SAM J. MERIGIAN, on behalf of himself and all persons who were shareholders of Sanders Confectionery Products, Inc., as a Class Action Under FRCP 23(a) and 23(b), Plaintiff-Appellant (90-2040), v. HELLER FINANCIAL, INC., a Delaware corporation; BUTZEL, KEIDAN, SIMON, MYERS & GRAHAM, a partnership; JOHN W. BUTLER, JR.; JAY ALIX, Defendants-Appellees., 973 F.2d 474

Summary

Plaintiff corporation owned a candy company. Defendant financial company loaned money to and entered into several transactions with plaintiff over a two-year period. The candy company filed for Chapter 11 bankruptcy. The consent financing order provided that the parties involved in the bankruptcy proceeding were barred from pursuing related claims against defendant. Plaintiff and others sued defendant alleging common law fraud and securities law claims. The district court dismissed plaintiffs' claims, concluding that the earlier bankruptcy proceedings barred the actions under the doctrine of res judicata. On appeal, the court affirmed, concluding that all elements of res judicata were satisfied. The judgment was final. Plaintiffs were parties to the bankruptcy proceeding because they owned the debtor or were equity security holders. Plaintiffs' claims should have been litigated during the bankruptcy proceeding because the purpose of the proceeding was to resolve all claims which would ...