Bluebird Partners, LP v. First Fidelity Bank
Bluebird Partners, L.P., a secondary purchaser of equipment trust interests for Continental Airlines, sued indenture trustees and their law firms for alleged violations of the Trust Indenture Act (TIA) and state law. Plaintiff claimed defendants failed to prudently protect certificate holders' interests during Continental's bankruptcy by not acting timely on adequate protection motions. Defendants moved to dismiss, arguing Bluebird Partners lacked standing as a secondary purchaser because federal TIA claims do not automatically transfer with the security. The court granted the motion to dismiss, holding that under federal common law, TIA claims do not automatically transfer to subsequent purchasers who were not injured at the time of the alleged wrongdoing, thus denying standing to Bluebird Partners. The court declined to retain jurisdiction over the pendent state-law claims.