Opinion ID: 147670
Heading Depth: 2
Heading Rank: 1

Heading: The Alter Ego Claims.

Text: We have previously addressed whether alter ego claims brought by a creditor under Texas state law are property of the estate within the meaning of § 541. S.I. Acquisition, 817 F.2d at 1152-53. We identified as operative the question whether a [debtor] corporation could assert an action against itself based upon alter ego. Id. at 1152. We recognized that alter ego claims are typically asserted by the debtor's creditors but noted that theoretically nothing in Texas law prohibits a corporation from asserting on its own an action based on alter ego and that in fact the underlying policy of the remedy supports this conclusion. Id. at 1153. We therefore held that the alter ego action brought by the creditor in fact belonged to the debtor and was property of the estate within the meaning of § 541(a)(1). Id. Our decision in S.I. Acquisition alone, however, does not necessarily resolve the question whether the alter ego claims brought by Cadle actually belong to the estate. That case dealt with a traditional veil-piercing claim, whereby a creditor attempts to hold liable a debtor-corporation's shareholders or its affiliated entities for the obligations of the debtor-corporation. Here, by contrast, Cadle has brought a reverse veil-piercing claim that seeks to hold Brunswick and JHM liable for the acts of the individual debtor, Moore. We have previously held that distinction to be one without a difference. In Schimmelpenninck v. Byrne ( In re Schimmelpenninck ), 183 F.3d 347, 358 (5th Cir. 1999), we found error in the judgments of the bankruptcy and district courts that a creditor's action based on reverse-piercing of a corporate veil does not constitute property of the bankruptcy estate, id. at 365, and we concluded that the reverse-piercing action belongs to the [trustee], not to one individual creditor of the Debtor, id. at 366. We recognize the tension between the rule and its application: A reverse veil-piercing claim, unlike a traditional veil-piercing claim, does not allege harm to the debtor. [4] Our decisions in S.I. Acquisition and Schimmelpenninck nevertheless control as to the alter ego claims: Those claims are property of the estate, [5] so the trustee may sell them to Cadle pursuant to § 363(b).