Securities Investor Protection Corp. v. Murphy (In Re Selheimer & Co.)

Opinion

STEPHEN RASLAVICH, Bankruptcy Judge.

Introduction

The Plaintiff has filed a motion to dismiss the Defendant’s third-party complaint. The Defendant opposes the motion. Hearing on the matter was held on October 19, 2004. For the reasons set forth below, the motion will be granted.

Factual Background

Plaintiff has filed suit against Edward Murphy III (Murphy) under § 723(a) of the Bankruptcy Code. Under that statute, where the liquidation of a bankrupt partnership will not yield enough to pay creditors in full, the individual partners become liable for the shortfall. See 11 U.S.C. § 723(a).…