Opinion ID: 835263
Heading Depth: 2
Heading Rank: 8

Heading: The Bankruptcy Court Consolidates the Hoyt Entities

Text: Once the trustee began to investigate the Hoyt enterprise, he found that he had a hard time isolating the assets that belonged solely to MLP and that the entities that comprised the Hoyt enterprise had been operated without regard to the separate existence of each. As a result, in December 1998, the bankruptcy court substantively consolidated all the Hoyt entities, effective from the date of the filing of the Chapter 7 proceeding. Also as a result of his investigation, the trustee decided not to assert claims against the investors for payment of the promissory notes. He determined that the note obligations were either nonexistent or unenforceable. It took the trustee several years to marshal the assets of the Hoyt estate and shut down the Hoyt enterprise. During those years, as the trustee testified, the accused worked hand in glove with the trustee to assist him in determining how the Hoyt enterprise had operated. However, the trustee eventually came to think that the accused himself had contributed to the losses that the estate had incurred, and the trustee asserted claims against the accused. The trustee sought, among other things, to have the accused disgorge the attorney fees that he had received prior to the court's establishment of the fund for investor payments of attorney fees. Eventually, the accused and the trustee reached a settlement of that dispute.