- Case Type:
- Business
- Case Status:
- Affirmed
- Citation:
- 23-40373 (5th Circuit, Mar 01,2024) Not Published
- Tag(s):
-
- Ruling:
- In the latest installment of a long-running family saga, one family member's argument that an order approving a trustee's sale of real estate and preserving the "liens, claims, and encumbrances" asserted by the parties and attaching them to the sale proceeds somehow creates a res judicata bar against another family member's claim to those proceeds "is indeed frivolous."
- Procedural context:
- Appeal from district court decision, which affirmed the bankruptcy court's decision on an adversary proceeding and related claim objection.
- Facts:
- This is a small part of a family drama over millions of dollars left to a widow, Suzann, who hired her son Michael to manage the assets. After more than a decade of litigation through probate, other state courts, bankruptcy, and arbitration, Suzann obtained an arbitration award finding that Michael defrauded her, breached his fiduciary duties as trustee, and committed negligence. The panel awarded Suzann more than $50 million and a constructive trust over essentially all entities that Michael formed or invested in with Suzann's assets. Michael put JMV Holdings, LLC into bankruptcy to protect it from that constructive trust and possible seizure by Suzann. A bankruptcy trustee took control of JMV and sold the real estate it owned. Both Suzann and Michael's wife Jennifer asserted claims to the proceeds--Suzann based on her constructive trust, and Jennifer based on a Deed of Trust that was recorded the same day that JMV filed its petition for relief. Jennifer lost.
- Judge(s):
- Jones, Haynes, Douglas
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