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In re Barbara Wigley

Summarizing by Bradley Pearce

Bustos v. Molasky (In re Molasky)

BAP No. NV-14-1109
9th Circuit BAP affirmed the decision of the bankruptcy court dismissing the complaint of intervening plaintiff Bustos after the complaint of the original plaintiff was dismissed by the court. The BAP found that Bustos was a permissive intervenor and not an intervenor of right because he could not satisfy all of the criteria for an intervenor of right set forth in League of United Latin Am. Citizens v. Wilson, 131 F.3d 1297, 1302 (9th Cir 1997). The original plaintiff was Busots's legal representative, so that criteria was not met. Consequently, because Bustos failed to file his own complaint before the deadline for filing objections to discharge of a debt, he had not independent right to maintain an action and his complaint was properly dismissed by the bankruptcy court.
Procedural context:
Appeal from the United States Bankruptcy Court for the District of Nevada.
One Cap Funding Corporation loaned money to a company and the debtor guaranteed the debt. Bustos was an investor in One Cap. One Cap timely filed a 523 complaint that the debt should not be discharged, but Bustos did not. Bustos's motion to intervene was granted, but after One Cap's complaint was dismissed, the bankruptcy court dismissed Bustos's complaint. Appeals followed. After a remand by the 9th Circuit, the bankruptcy court again dismissed the complaint and Bustos appealed to the BAP.
Pappas, Jury, and Houle

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