Bankruptcy Court Correctly Nixed Fraud Suit, Appeals Court Says

A bankruptcy court correctly blocked Rose Court LLC from bringing an amended fraud claim against lenders because the company had previously agreed to voluntarily dismiss similar suits, an appellate court held.

Rose Court had previously agreed to dismiss a fraud claim similar to the one it was trying to assert in the US Bankruptcy Court for the Northern District of California, and therefore it’s barred from again asserting that claim under the Federal Rule of Civil Procedure 41(a)(1)(B)'s two dismissal rule, the US Court of Appeals for the Ninth Circuit held Thursday.

“The two-dismissal rule bars Rose Court from asserting ...