Marshak v. Hyundai Steel Co. (In re Prime Metals U.S.A., Inc.)
- Summarized by David Treacy , U.S. Bankruptcy Court, Eastern District of Kentucky
- 4 weeks 9 hours ago
- Case Type:
- Business
- Case Status:
- Affirmed
- Citation:
- No. 24-53 (9th Circuit, Dec 06,2024) Not Published
- Tag(s):
-
- Ruling:
- The U.S. Court of Appeals for the Ninth Circuit affirmed the dismissal of a Chapter 7 Trustee's claims against a creditor that allegedly received two sets of prepetition fraudulent transfers from the debtor. The Ninth Circuit agreed with the bankruptcy court that that the Trustee could not satisfy his burden of production, i.e., that the Trustee failed to identify enough specific evidence to support essential elements of his claims so as to defeat the creditor's request for a judgment as a matter of law.
- Procedural context:
- The Ninth Circuit's opinion explains the shifting burden on motions for summary judgment when a defendant argues a plaintiff lacks sufficient evidence to support all essential elements of its claims (i.e., when the defendant files a "put up or shut up" motion). Specific issues discussed in the opinion include (a) the intent element of an actually fraudulent transfer claim, (b) whether the creditor was a statutory or non-statutory insider via the exercise of control over the debtor, (c) what constitutes reasonably equivalent value in the context of a constructive fraudulent transfer claim, and (d) what must be established to find alter ego liability under California law.
- Facts:
- Debtor Prime Metals U.S.A., Inc. filed a chapter 7 petition in the U.S. Bankruptcy Court for the Central District of California. Richard A. Marshack was appointed as the Chapter 7 Trustee. He filed an adversary proceeding against Creditor Hyundai Steel Company asserting eleven claims under the Bankruptcy Code and California law to, inter alia, avoid and recover fraudulent transfers (actual and/or fraudulent) from Debtor to Creditor. The bankruptcy court granted Creditor's motion to dismiss in part, eliminating five claims; Trustee did not appeal the dismissal, Creditor then moved for a summary judgment on the remaining claims at the close of discovery. The bankruptcy court held oral argument, at which the Trustee abandoned his preference claims. The bankruptcy court then granted the motion as to the remaining claims, finding that the Trustee did not present admissible evidence sufficient to establish triable issues of material fact precluding a judgment as a matter of law on those claims. The Trustee appealed to the U.S. Bankruptcy Appellate Panel for the Ninth Circuit, which affirmed. The Trustee then filed a subsequent appeal to the Ninth Circuit.
- Judge(s):
- OWENS, LEE, and KOH
ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!
