When the orginal creditor itself is in BK

[Dst1]

I'm of course thinking about Advanta which if you don't know there situation you can read about here. http://www.advantareorg.com/index.php3

My understanding of the process going forward is that since Advanta has refused to fund its credit card subsidiary the FDIC will hold a sale of the assets (CC debt). Under the FDIC JDC program the debt will sold at 1% on the dollar with the FDIC as a limited partner getting 1/2 whatever is collected.

My question is what is Advanta's fiduciary duty to its creditors in its own bankruptcy. If a debtor of Advanta were to offer them 5% of the original loan amount would they be violating their own legal duty to their own creditors in bankruptcy if they refused it.

It seems to me that since they are in bankruptcy they have a legal duty to maximize the return to their own creditors. If that can be done by a settlement offer rather than a fire sale at the FDIC it seems to me that legally they *must* accept that offer.

Ah, if life were so simple. What am I missing?

[HHM]

This issue is over the head of any individual debtor of Advanta. Let's say you are correct, so what. There really isn't anything you can do about it, the person with standing to object to Advanta's refusal to accept a reasonable settlement are Advanta's creditors, not you. Interesting point and perspective, but useless to the individual debtor caught up in the fiasco.

[Dst1]

Thanks HHM. I knew there was something I was missing and you fingered it.