IN THE UNITED STATES BANKRUPTCY COURT

FOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

IN RE: § 

 § CASE NO. 20-33176-sgj7

REAVANS GILBERT, LLC, § 

 § Chapter 7

Debtor. § 

_________________________________________ § 

 § 

DANIEL J. SHERMAN, as Chapter 7 Trustee § 

for Reavans Gilbert, LLC, § 

 § Adversary No. 23-03098-sgj 

Plaintiff, § 

 § 

v. § 

 § 

REAVANS CORPORATION, TX RCG, LLC, § 

and REAVANS CAPITAL GROUP, LLC, § 

_________________________________________ § 

MEMORANDUM OPINION AND ORDER DENYING TRUSTEE’S

MOTION FOR PARTIAL SUMMARY JUDGMENT

Signed November 14, 2024

______________________________________________________________________

The following constitutes the ruling of the court and has the force and effect therein described.

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This bankruptcy case was commenced on December 23, 2020, with the filing by Reavans

Gilbert, LLC (“Reavans Gilbert” or “Debtor”) of a voluntary petition for relief under chapter 7 of 

the Bankruptcy Code, and Daniel J. Sherman was appointed as Chapter 7 trustee (“Trustee”). 

Currently before the court is the Trustee’s Motion for Partial Summary Judgment on Ponzi Scheme 

Issue (“Motion for Partial Summary Judgment”)1 filed on August 16, 2024, in the above referenced 

adversary proceeding (“Action”). The Action has been referred to by the parties as the 

“Substantive Consolidation Adversary” because the Trustee ultimately seeks the equitable remedy 

of substantive consolidation of three non-debtor affiliates (“Non-Debtor Affiliates”) of the Debtor 

into the bankruptcy estate of the Debtor, for purposes of administration and distribution of assets.

This Action was commenced on December 27, 2023, not with the filing of a traditional complaint, 

but by virtue of an order from this court converting the Trustee’s motion for substantive 

consolidation, that had been filed in the main bankruptcy case on September 14, 2023

(“Substantive Consolidation Motion”),

2 into an adversary proceeding, following the court’s ruling 

at a hearing on the Substantive Consolidation Motion that due process considerations required the 

Trustee’s request for substantive consolidation of non-debtor entities into the Debtor be brought 

by an adversary proceeding under Federal Rules of Bankruptcy Procedure 7001, et seq.

3

 

Importantly, the Non-Debtor Affiliates—the targets of the Trustee’s substantive consolidation 

request—having been dissolved or forfeited under state law in 2021 and 2022, had not responded 

to the Substantive Consolidation Motion, have not filed an answer or response in this Action (or a 

response to the instant Motion for Partial Summary Judgment), and the Trustee has not filed a 

1 Dkt. No. 52.

2 Trustee’s Motion for Entry of Order Substantively Consolidating Assets and Liabilities of Debtor and Non-Debtor 

Affiliates for Purposes of Administration and Distribution. Bankr. Dkt. No. 59. 3 See Order Regarding Trustee’s Motion for Entry of Order Substantively Consolidating Assets of Debtor with Reavans 

Corporation, TX RCG, LLC, and Reavans Capital Group, LLC for Purposes of Administration and Distribution, 

entered on December 27, 2023. Bankr. Dkt. No. 95.

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motion for entry of clerk’s default as to the Non-Debtor Affiliates—the only named defendants in 

this proceeding. Rather, it was six entities who had been named as defendants in one of three 

fraudulent transfer actions (the “Fraudulent Transfer Actions”)4 commenced by the Trustee in 

December 2022, who initially opposed the Trustee’s Substantive Consolidation Motion and who 

are intervenors (the “Intervenors”) in this adversary proceeding, who have filed oppositions to the 

Trustee’s Motion for Partial Summary Judgment.

In his Motion for Partial Summary Judgment, the Trustee does not seek a summary 

judgment on the issue of substantive consolidation; rather, as the title of his motion indicates, he 

is seeking a partial summary judgment on the “Ponzi scheme issue,” and, more specifically, he 

“prays that, in each adversary proceeding where the Trustee has asserted a claim under § 548,” –

which the court notes does not include this Action – “that this Court hold, as a matter of law, that 

the Debtor operated a Ponzi scheme, and as such, also acted with the requisite intent to ‘hinder, 

delay, or defraud’ it’s creditors under 11 U.S.C. § 548(a)(1)(A).”5 Because the Trustee does not

assert a fraudulent transfer claim in this Action or plead in his “complaint” in this Action (i.e., the 

converted Substantive Consolidation Motion) that the Debtor operated a Ponzi scheme or that such 

a finding would necessarily lead the court to grant the requested relief of substantive consolidation 

of the Non-Debtor Affiliates with the Debtor’s bankruptcy estate—those causes of action and 

allegations are contained in one or more of the other actions (the Fraudulent Transfer Actions) that 

the Trustee apparently refers to in his prayer for relief in his Motion for Partial Summary Judgment 

– the court denies the Motion for Partial Summary Judgment.

4 In his original complaint filed in each of the Fraudulent Transfer Actions (two years to the day from the petition date, 

which was the deadline for the Trustee to commence fraudulent transfer actions pursuant to Bankruptcy Code § 548 

and state fraudulent transfer laws (through Bankruptcy Code § 544)), the Trustee sought the avoidance and recovery 

of certain transfers alleged to have been made by the Debtor under theories of both actual and constructive fraud.

5 Motion for Partial Summary Judgment ¶ 4.

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A brief discussion of the Debtor’s and its non-debtor affiliates’

6 business operations and 

organizational structure as well as how we arrived at this point, procedurally, is necessary to 

explain the court’s denial of the Motion for Partial Summary Judgment.

Reavans Gilbert was one of numerous special purpose entities formed under the general 

umbrella of an enterprise (“Reavans”) owned and controlled by Nick Ichimaru (“Ichimaru”) and 

Hiroyuki Kawata (“Kawata”) that operated in real estate in California and Texas, generally 

working with Japanese nationals to facilitate investments relating to real estate in the United States. 

Reavans began with the formation of Reavans Corporation (one of the defendants in this Action)

in California in October 2002. Ichimaru and Kawata each owned 50% of Reavans Corporation, 

with Ichimaru as president and Kawata as the registered agent and chief financial officer. Reavans 

Capital Group, LLC (“Reavans Capital Group”), another defendant in this Action, was formed in 

June 2009 as a Texas LLC. Ichimaru was the sole member of Reavans Capital Group. The third 

defendant in this adversary proceeding, TX RCG, LLC (“TX RCG”), was formed in March 2015

with Reavans Capital Group as its sole member and both Ichimaru and Kawata as managers. 

Reavans Gilbert was not formed until July 31, 2017, with TX RCG as its sole member, Ichimaru 

as its president, and Kawata as its secretary. TX RCG formed at least six other special purpose 

entities as part of the Reavans Enterprise: Reavans Annex LLC (“Reavans Annex”), Reavans Lake 

Avenue, LLC (“Reavans Lake Avenue”), Reavans Villa Maria LLC, Reavans Trinity Meadows 

LLC, Reavans Gaslight LLC, and Reavans Lakeside LLC.

With respect to Reavans’ activity in Texas, there appear to have been two primary 

investment opportunities offered to Japanese nationals. First, various Reavans entities purchased 

and sold real property interests in individual condominium units to Japanese investors such that at 

6 The Reavans enterprise consisted of more than a dozen non-debtor affiliates, only three of which the Trustee seeks 

to substantively consolidate with the Debtor.

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the closing of the transaction, the Japanese individual or entity would own a condominium or 

condominium units, and, second, funds were raised from Japanese nationals as equity-style 

investments in U.S.-based, single-purpose entities where the entity would acquire the real property, 

which would be operated and/or rehabilitated and sold, with the proceeds of the sale being 

distributed to the equity holders, who also received certain payments along the way.

The Debtor, Reavans Gilbert, ultimately purchased three pieces of real property in Dallas 

(the “Properties”). Reavans Gilbert borrowed the funds to purchase the Properties, and that debt 

was secured by deeds of trust on the Properties. On November 4, 2019, Reavans Gilbert, along 

with two Reavans Gilbert affiliates—Reavans Annex and Reavans Lake Avenue (neither of which 

are the target of the Trustee’s substantive consolidation efforts)—filed voluntary petitions for relief 

under Chapter 11 of the Bankruptcy Code in the Northern District of Texas, Dallas Division.

7

 

None of the three Non-Debtor Affiliates who are defendants in this Action sought bankruptcy relief 

in 2019. A sale process was undertaken regarding the real property holdings of all three debtors –

Reavans Gilbert and the two Reavans entities who were debtors in their own Chapter 11 cases. On 

January 31, 2020, the bankruptcy court entered an order in each of the three Reavans bankruptcy 

cases, approving the sale of the real property and a separate order dismissing each of the debtors’ 

bankruptcy cases. Ultimately, Reavans Gilbert completed a sale that satisfied certain debts secured 

by the Properties, but funds were not available to provide a return to the Reavans Gilbert investors 

upon the closing of the sale.

On December 23, 2020, Reavans Gilbert filed its second petition for relief under the

Bankruptcy Code, this time, under Chapter 7. Neither Reavans Annex nor Reavans Lake Avenue, 

who had been debtors in the 2019 Chapter 11 cases, filed second petitions for relief, so Reavans 

7 In re Reavans Gilbert, LLC, Bankr. Case No. 19-33705-hdh11, Dkt. No. 1; In re Reavans Annex, LLC, Bankr. Case 

No. 19-33704-hdh11, Dkt. No. 1; and In re Reavans Lake Avenue, LLC, Bankr. Case No. 19-33707-hdh11, Dkt. No. 1.

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Gilbert is the only Reavans entity that is currently a debtor – the Debtor – in this bankruptcy case. 

As noted above, the Trustee was appointed in this bankruptcy case and charged with administering 

the Debtor’s assets.

On December 23, 2022 (the Trustee’s deadline for commencing fraudulent transfer 

actions), the Trustee commenced three adversary proceedings, seeking to avoid and recover from 

the defendants allegedly fraudulent transfers of the Debtor under theories of actual and 

constructive fraud (the “Fraudulent Transfer Actions”):

Adversary 

Proceeding Fraudulent Transfer Adversary Defendants8

23-3116-sgj

Thrive Lending Fund, LLC and Thrive Lending Fund II, LLC (the “Thrive Parties”), 

Reavans Annex, Reavans Lakeside, LLC, Reavans Gas Light, LLC, and Reavans 

Lake Avenue

23-3117-sgj Wedgewood Commercial Holdings, LLC (“Wedgewood”) and Hollyvale Rental 

Holdings, LLC (“Hollyvale”)

23-3118-sgj Oyster Lincoln, LLC and Oyster Real Estate Investments, Inc. (the “Oyster 

Parties”), Ichimaru, Kawata, Frank Stier & Associates, LLC, TX RCG, and Reavans 

Corporation

The Trustee did not raise “the Ponzi scheme issue” in the Fraudulent Transfer Actions until he filed 

his first amended complaint in each of the Fraudulent Transfer Actions in the Spring of 2023. In 

addition, the Trustee, in his first amended complaint in Adversary Proceeding 23-3118, first sought 

the remedy of substantive consolidation of Reavans Corporation and TX RCG into the Debtor’s 

estate (but did not seek substantive consolidation of Reavans Capital Group, a defendant in this 

Action but not a defendant in any of the Fraudulent Transfer Actions).

8 The court points out that Reavans Capital Group, a Non-Debtor Affiliate named as a defendant in this Action, is not

named as a defendant in any of the Fraudulent Transfer Actions, whereas the other two Non-Debtor Affiliates named 

as defendants in this Action, Reavans Corporation and TX RCG, are defendants in Adversary Proceeding No. 23-

3118.

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On September 14, 2023, the Trustee filed his three-page, six-paragraph Substantive 

Consolidation Motion in the main bankruptcy case, requesting “that the Court enter an order 

substantively consolidating Debtor with non-debtor entities, Reavans Corporation, TX RCG, LLC, 

and Reavans Capital Group, LLC.”9 The Trustee specifically prayed “that this Court grant the 

Trustee’s Motion for Substantive Consolidation, and enter an order: (i) substantively consolidating 

the Debtor with the Non-Debtor Affiliates; (ii) eliminating all intercompany claims and guaranties;

[and] (iii) allowing the Trustee to jointly administer the substantively consolidated estate.”10

Neither the Fraudulent Transfer Actions nor allegations of an alleged Ponzi scheme are mentioned 

anywhere in the short motion. None of the Reavans entities targeted for substantive consolidation 

filed a response to the Substantive Consolidation Motion; in fact, the Thrive Parties, Wedgewood 

and Hollyvale, and the Oyster Parties were the only parties to oppose the Substantive 

Consolidation Motion. A hearing was held on November 13, 2023, during which the court ordered 

that the Trustee’s request for substantive consolidation of the Non-Debtor Affiliates into the 

Debtor’s estate must be brought as an adversary proceeding. Trustee’s counsel uploaded a 

proposed order based on the court’s oral ruling at the hearing, and, on December 27, 2023, the 

court signed and entered it on the docket of the main bankruptcy case,

11 ordering, specifically, that 

1. The Court hereby converts the Trustee’s Motion for Substantive Consolidation 

into an adversary proceeding to which Part VII of the Federal Rules of 

Bankruptcy Procedure shall apply.

2. The Clerk of Court shall assign this contested matter to a new adversary 

proceeding number (the “Adversary Proceeding”) and issue summons and a 

scheduling order for service upon each of the Non-Debtor Affiliates identified 

in Footnote 1 hereof under FED. R. BANK. P. 7004.

3. All potential creditors of the Non-Debtor Affiliates must be served with notice 

of the relief requested in the Adversary Proceeding.

9 Bankr. Dkt. No. 59 ¶ 2. 10 Bankr. Dkt. No. 59 ¶ 6. 11 Bankr. Dkt. No. 95.

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A copy of the Substantive Consolidation Motion was entered on the docket of the main bankruptcy 

case12 and also entered on the docket of the newly created adversary proceeding13 as the 

“Complaint” initiating this Action. None of the Non-Debtor Affiliates named as defendants and 

targeted for substantive consolidation (all three of which had been dissolved or forfeited under 

applicable state law by this time) has appeared or filed an answer in this Action. The Trustee has 

not, however, filed a motion for entry of clerk’s default in this adversary proceeding. 

The Thrive Parties, Wedgewood and Hollyvale, and the Oyster Parties (all parties to one 

of the Fraudulent Transfer Actions) sought to intervene in this adversary proceeding, and the court 

granted their motions to intervene pursuant to agreed orders entered on March 18, 2024.

14 With 

no answer having been filed in this Action (by the Defendants or the Intervenors), the Trustee filed 

his Motion for Partial Summary Judgment on August 16, 2024, which he titled Trustee’s Motion 

for Partial Summary Judgment on Ponzi Scheme Issue and wherein he seeks a summary judgment 

in his favor “on whether the Debtor operated a Ponzi scheme,” specifically praying, as noted above,

that “in each adversary proceeding where the Trustee has asserted a claim under § 548, that this 

Court hold, as a matter of law, that the Debtor operated a Ponzi scheme, and as such, also acted 

with the requisite intent to ‘hinder, delay, or defraud’ it’s creditors under 11 U.S.C. § 

548(a)(1)(A).”

The Intervenors filed a Joint Response Opposing Trustee’s Motion for Partial Summary 

Judgment on Ponzi Scheme Issue (“Joint Response”)15 and brief in support (“Joint Response 

Brief”)16 on September 13, 2024. The Intervenors oppose the Trustee’s Motion for Partial 

12 Bankr. Dkt. No. 96. 13 Dkt. No. 1. 14 See Dkt. No. 36 (with respect to the Thrive Parties and Wedgewood and Hollyvale) and Dkt. No. 40 (with respect 

to the Oyster Parties). The intervening parties will be referred to, collectively, as the “Intervenors.” 15 Dkt. No. 58. 16 Dkt. No. 59.

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Summary Judgment based on several grounds, including that (1) the Trustee has asked for a partial 

summary judgment on an issue that is not before the court in this adversary proceeding and 

therefore the “issue” cannot be considered or adjudicated by the court; (2) even if the Ponzi scheme 

issue had been sufficiently pleaded in this adversary proceeding (as opposed to the Fraudulent 

Transfer Actions), it should be denied because “[t]he issue of whether and to what extent a Ponzi 

scheme has been perpetrated is a fact-intensive inquiry” and those facts are disputed such that the 

issue would need to go to trial; (3) “there are material and fatal proof problems with the summary 

judgment evidence the Trustee relies on—namely an insufficient and unsupported declaration and 

report of a purported expert”; and (4) consideration of the Motion for Partial Summary Judgment 

“is premature for so long as discovery remains outstanding and/or deficient.”17

The court agrees with the Intervenors that the Trustee seeks a partial summary judgment 

on issues that are outside of the scope of the operative complaint here – that the Trustee’sfraudulent 

transfer claims and Ponzi scheme allegations have not been pleaded in the live complaint in this

adversary proceeding, which is the three-page Substantive Consolidation Motion filed in the main 

bankruptcy case that was converted to the complaint in this Action, and that the issue is, thus, not

properly before the court for its consideration or adjudication under Rule 56 of the Federal Rules 

of Civil Procedure regarding motions for summary judgment. Intervenors argue in their Joint 

Response Brief that it is well-settled law that “‘[s]ummary judgment cannot be entered on a claim 

not pleaded in the complaint, as that claim is not fairly before the Court.’”18 The Intervenors also 

cite to Northern District of Texas cases for the propositions that an unpleaded claim cannot form 

17 See Joint Response ¶¶ 1-4. 18 Joint Response Brief ¶ 31 (quoting Wildhorse Res. Mgmt. Co. v. G&C Constr. Int’l, LLC, No. H-18-2456, 2019 WL 

5684228, at *7 (S.D. Tex. Oct. 31, 2019)) (cleaned up).

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the basis for obtaining summary judgment19 and that, generally speaking, “An unpleaded claim is 

not before the Court and cannot be considered or adjudicated by the Court.”20 The Trustee did not 

file a reply brief here and so has not cited, nor has the court been able to find, case law that suggests 

a different result must obtain.21 

The Trustee here is asking for a partial summary judgment on an issue that he has not 

pleaded in this Action but that he has pleaded in the Fraudulent Transfer Actions by asking for a 

judgment “in each adversary proceeding where the Trustee has asserted a claim under § 548, that 

this Court hold, as a matter of law, that the Debtor operated a Ponzi scheme, and as such, also acted 

with the requisite intent to ‘hinder, delay, or defraud’ it’s creditors under 11 U.S.C. § 548(a)(1)(A).” 

The Trustee cannot obtain a summary judgment on, and the court cannot consider or adjudicate, 

an unpleaded claim or issue. Thus, the court must deny the Trustee’s Motion for Partial Summary 

Judgment on this basis and will not consider the Intervenors’ other bases for opposing the motion

that are grounded in the substantive application of Rule 56. Accordingly,

IT IS ORDERED that the Trustee’s Motion for Partial Summary Judgment be, and hereby

is, DENIED.

###End of Memorandum Opinion and Order###

19 Joint Response Brief ¶ 31 (quoting Kirkindoll v. Nat'l Credit Union Admin. Bd., No. 3:11-CV-1921-D, 2014 WL 

7178005, at *7 (N.D. Tex. Dec. 17, 2014) (“A movant can neither obtain summary judgment nor avoid the opposing 

party’s summary judgment motion based on an unpleaded claim.”)). 20 Joint Response Brief ¶ 31 (citing Waller v. Hoeppner, No. 4:15-CV-670-P, 2021 WL 9508395, at *1 (N.D. Tex. 

Apr. 9, 2021)). 21 In fact, Judge Fitzwater, who penned the Kirkindoll opinion, recently (just days ago) cited to the quoted language 

from Kirkindoll in denying a party’s motion for summary judgment on an unpleaded defense. Utica Mut. Ins. Co. v. 

Hanover Ins. Co., No. 3:23-cv-2306-D, 2024 WL 4703089, at *4 (N.D. Tex. Nov. 5, 2024). He also noted that his 

2006 opinion in Jacobs v. Tapscott—wherein he stated, “[Parties] cannot avoid summary judgment, however, based 

on unpleaded claims.”—had been affirmed by the Fifth Circuit on appeal. Id. (citing Jacobs v. Tapscott, 2006 WL 

2728827, at *8 (N.D. Tex. Sept. 25, 2006), aff’d 277 F. App’x 484 (5th Cir. 2008)).

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