In Bryan v. Doar, (Del. Supr., Nov. 6, 2006), read opinion here, the Delaware Supreme Court determined that a bankruptcy trustee did not have standing to appeal a decision of the Chancery Court in light of the trustee abjuring substitution under Rule 25(c) as a formal party in the case at the trial level. In addition, the trustee lacked standing to appeal because of his decision not to intervene as a party at the trial level.
The case started in 2000 as a claim against directors of Ingersoll International, which later went into bankruptcy. After the Plan of Liquidation was approved, and the stay lifted, the creditor trustee was empowered to prosecute the lawsuit. If the trustee decided not to pursue the lawsuit, the Plan allowed the original plaintiffs to pursue it. The Chancery Court granted a Motion to Dismiss for failure to prosecute.
The trial court found that failure to prosecute the case for 7 months after the Plan was confirmed was unreasonable and prejudicial. In ordering the dismissal, the Chancery Court also noted that the trustee and the original plaintiffs were acting in concert with the same attorney. The trustee tried to pursue the appeal in his own name, and the original plaintiff decline the opportunity to file a separate appeal. The court relied on precedent that a non-party does not have standing to appeal.