Opinion ID: 1269674
Heading Depth: 3
Heading Rank: 1

Heading: Alter ego/veil piercing claims

Text: The Trustee brought alter ego/veil piercing claims against Enodis and Welbilt Holding, seeking a judgment that the Trustee could collect from Enodis and Welbilt Holding any amounts needed to satisfy Consolidated's creditors. The bankruptcy court concluded that the Trustee lacked standing under §§ 541(a) or 544(a) of the Bankruptcy Code to bring these claims. On appeal from the bankruptcy court, the district court concluded that the Trustee did in fact have standing to bring alter ego/veil piercing claims against Enodis and Welbilt Holding under § 541. [7] However, the court stated that it agreed with the bankruptcy court's ultimate legal conclusion that the Trustee's claims fail under that section. Appellants' App. at 87. The Trustee contends that the district court erred in concluding that the Trustee was not entitled to judgment on his alter ego/veil piercing claims by purporting to adopt a ruling that the bankruptcy court never made and by failing to review de novo the merits of the Trustee's claims. In order to prevail on an alter ego/veil piercing claim under Indiana law, a court will consider whether the plaintiff has adduced evidence showing: (1) undercapitalization; (2) absence of corporate records; (3) fraudulent representation by the corporation's shareholders or directors; (4) use of the corporation to promote fraud, injustice, or illegal activities; (5) payment by the corporation of individual obligations; (6) commingling of assets or affairs; (7) failure to observe required formalities; or (8) other shareholder acts or conduct ignoring, controlling or manipulating the corporate form. Nat'l Soffit & Escutcheons, Inc. v. Superior Sys., Inc., 98 F.3d 262, 265-66 (7th Cir.1996) (citing Aronson v. Price, 644 N.E.2d 864, 867 (Ind.1994)). As we have already noted, Rule 52(a) requires that the court in a bench trial set forth findings, stated either in the court's opinion or separately, which are sufficient to indicate the factual basis for the ultimate conclusion. Rucker v. Higher Educ. Aids Bd., 669 F.2d 1179, 1183 (7th Cir.1982) (citation omitted). Doing so serves two purposes: (1) to provide appellate courts with a clear understanding of the basis of the trial court's decision, and (2) to aid the trial court in considering and adjudicating the facts. Bartsh v. Nw. Airlines, Inc., 831 F.2d 1297, 1304 (7th Cir.1987). In the present case, the district court's opinion does not indicate the factual basis for its conclusion that the Trustee has not presented evidence to support his alter ego/veil piercing claims. Although findings on every issue presented in a case are unnecessary if the trial court has found such essential facts as lay a basis for the decision, In re Lemmons & Co., 742 F.2d 1064, 1070 (7th Cir.1984), in the present case, the courts below did not include any factual findings relating to the merits of the Trustee's alter ego/veil piercing claims. The decision to disregard the corporate form is a highly fact-sensitive inquiry, Winkler v. V.G. Reed & Sons, Inc., 638 N.E.2d 1228, 1232 (Ind.1994), and in light of the district court's cursory treatment of the Trustee's claims, we are unable to discern the basis of the court's ultimate conclusion on each factual issue. Denofre, 532 F.2d at 45. Thus, we vacate and remand with directions to the district court to comply with Rule 52(a).