Opinion
5788
January 3, 2002.
Order, Supreme Court, New York County (Barbara Kapnick, J.), entered on or about October 16, 2000, which, in a fraudulent conveyance action, denied as academic plaintiffs' motion to restrain defendants from transferring assets in her possession, and granted defendants' cross motion to dismiss the complaint as barred by res judicata, unanimously affirmed, without costs.
JOHN M. BRICKMAN, for plaintiffs-appellants.
KENNETH J. GOULD, for defendants-respondents.
Before: Sullivan, J.P., Rosenberger, Lerner, Rubin, Buckley, JJ.
The IAS court correctly held that the instant action is barred by the settlement of the bankruptcy Trustee's fraudulent conveyance claim in the bankruptcy proceeding (see generally, Sanders Confectionery Prods. v. Heller Fin., 973 F.2d 474, 480-481, cert denied 506 U.S. 1079). We reject plaintiffs' argument that to the extent their claim was not satisfied by such settlement, they are not bound thereby, because their interests became adverse to the Trustee's when the Bankruptcy Court subsequently found their claim to be nondischargeable and gave them leave to pursue it outside of the bankruptcy proceeding. As the IAS court found, plaintiffs "had an opportunity to object to the terms of the settlement and to raise the potential nondischargeability of their claim", but instead fully participated in and sought the Bankruptcy Court's approval of the settlement (see, In Re Medomak Canning, 922 F.2d 895, 902-903). We have considered and rejected plaintiffs' other contentions.
THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.