Fifth Circuit Arguably Expands the Barton Doctrine’s Ultra Vires Exception

January 16, 2025

Fifth Circuit Arguably Expands the Barton Doctrine’s Ultra Vires Exception

A receiver was tagged $45,000 for failing to turn over estate property by demanding payment of administrative fees.

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Opinion Link

View Opinion

https://abi-opinions.s3.us-east-1.amazonaws.com/Ready+Mix-+Berleth.pdf

Case Details

Case Citation

Berleth v. Preferred Ready-Mix LLC (In re Preferred Ready-Mix LLC), 24-20158 (5th Cir. Dec. 31, 2025)

Case Name

Berleth v. Preferred Ready-Mix LLC (In re Preferred Ready-Mix LLC),

Case Type

Court

5th Circuit

Bankruptcy Tags

Claims

Bankruptcy Litigation

Ethics

Practice and Procedure

Professional Compensation/Fees

Venue/Jurisdiction

Comments

Submitted by Edward Boltz on January 16, 2025

Useful observations about how the release of the property was conditioned on payment of administrative expenses put the receiver outside the protections of City of Chicago v. Fulton, as that was more than merely maintenance of the status quo. Car lenders routinely insist on payment of towing and other costs (or even proof that the debtor has made their first plan payment) before turning over a vehicle that was repossessed pre-petition. That demand (even by the creditor's attorney?) might taint otherwise innocent behavior. Whether a Sheriff 's similar demands for payment of fees before release of garnished wages could be implicated as well, as that ultra vires act could also be argued to be outside the scope of any official duties which might otherwise be shielded by sovereign immunity.