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Argued: September 19, 2005

Before: WINTER, SOTOMAYOR, and WESLEY, Circuit Judges.

In August 1994, CBI Holding Company, Inc. and all but one of its subsidiaries (collectively, “CBI”) filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code. Ernst & Young and Ernst & Young LLP (together, “E&Y”), the pre-bankruptcy accountants for CBI and Defendants-Appellees in this action, filed a Proof of Claim against CBI in those proceedings for allegedly unpaid auditing and consulting services. On August 23, 1995, the United States Bankruptcy Court for the Southern District of New York (Lifland, J.) confirmed a Plan of Reorganization (“the Plan”) and appointed Bankruptcy Services, Inc. (“BSI”), the Plaintiff-Appellant in this action, the disbursing agent of the Plan. On October 16, 1996, BSI filed a complaint in the bankruptcy court, followed by an amended report on October 25, 1996, pressing seven claims against E&Y concerning the professional services E&Y rendered to CBI from 1992 to 1994. BSI brought each of the seven claims as the successor to the claims of CBI under the Plan (collectively, “the CBI claims”). Pursuant to a settlement contained in the Plan, BSI also brought four of these claims as the assignee of the claims that Trust Company of the West (“TCW”) acquired as a pre-bankruptcy creditor of CBI (collectively, “the TCW claims”). Finally, BSI also brought one claim — for expungement of E&Y’s Proof of Claim — as the assignee of an objection to E&Y’s Proof of Claim filed by the Official Unsecured Creditors’ Committee (“Creditors’ Committee”). On April 5, 2000, the bankruptcy court granted judgment for BSI on six of its seven claims, see Bankr. Servs., Inc. v. Ernst & Young (In re CBI Holding Co.),(“CBI I” or “Bankruptcy Opinion”), 247 B.R. 341 (Bankr. S.D.N.Y. 2000), and later awarded BSI approximately $70 million in damages. In two orders entered on June 30, 2004, see Ernst & Young v. Bankr. Servs., Inc. (In re CBI Holding Co.)(“CBIII” or “June Order”), 311 B.R. 350 (S.D.N.Y. 2004), and October 25, 2004, see Ernst & Young v. Bankr. Servs., Inc. (In re CBI Holding Co.) (“CBIIII” or “October Order”), 318 B.R. 761 (S.D.N.Y. 2004), the United States District Court for the Southern District of New York (Wood, J.)*fn1 vacated the judgment of the bankruptcy court, and directed judgment in E&Y’s favor, on the grounds that: (1) the fraudulent acts of CBI’s management must be imputed to the company itself, thereby depriving BSI of standing to press the CBI claims; and (2) BSI lacks standing to assert the TCW claims under Barnes v. Schatzkin, 215 A.D. 10 (1st Dep’t 1925). BSI appeals from each of these grounds. We agree and reverse.

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