Supreme Court Passes on Bankruptcy Trustee, Lab Owner Dispute

The U.S. Supreme Court turned down a case involving jurisdictional issues related to whether a failed blood-testing company’s bankruptcy trustee can proceed with a suit accusing its majority shareholders of fraudulent transfer claims.

The justices’ order Monday means Atherotech Inc. trustee Thomas E. Reynolds can pursue his suit in the U.S. District Court for the Northern District of Alabama as long as the shareholders—Behrman Capital IV LP and one of its funds, MidCap Financial Investment LP—are properly served under Bankruptcy Rule 7004(d). That rule allows plaintiffs in bankruptcy-related lawsuits to serve defendants anywhere in the U.S.

Reynolds sued Behrman Capital ...