Perhaps the most significant part of the Newsome decision is the Tenth Circuit's holding that courts may consider whether a bankrupt company's creditors were injured in the forum state when evaluating whether a defendant's pre-bankruptcy conduct establishes sufficient “minimum contacts” there. Most of Mahalo USA's creditors were located in Oklahoma.

Importantly, the Tenth Circuit held that a creditor's in-state injury may support a finding of personal jurisdiction even if the creditors potentially have no cause of action against the defendants. Here, the litigation trustee's complaint was ambiguous as to whether the breach of fiduciary duty occurred while Mahalo USA was solvent or after it became insolvent. Any duty owed by the defendants while Mahalo USA was solvent (or teetering on the edge of insolvency) would be to Mahalo Canada, not to Mahalo USA's creditors. While recognizing this “potential defect in the substance” of the trustee's allegations, the Tenth Circuit nevertheless believed that the jurisdictional and substantive analyses should be kept distinct. Accordingly, it held that there were sufficient forum-related activities to justify exercising personal jurisdiction over the individual defendants.

The Tenth Circuit also held that the Canadian defendants could not avoid personal jurisdiction in Oklahoma by invoking the fiduciary shield doctrine. Under this doctrine, a nonresident corporate agent generally is not individually subject to a court's jurisdiction based on acts undertaken on behalf of the corporation. The Tenth Circuit, however, held that the fiduciary shield doctrine does not apply to claims for breach of fiduciary duty. It reasoned that these claims, by their very nature, allege that the agent did not act on the principal's behalf, but in the agent's own interest at the principal's expense.

Finally, the Tenth Circuit affirmed the district court's decision not to exercise personal jurisdiction over a Canadian law firm that allegedly aided the defendants by advising them and performing other legal services which facilitated Mahalo USA's demise. The Tenth Circuit reasoned that out-of-state attorneys working outside of the forum do not “purposefully avail” themselves of the client's home forum's laws and privileges without some evidence that they reached out to the client's home forum to solicit the client's business. There was no such evidence here.