Opinion ID: 2516776
Heading Depth: 4
Heading Rank: 4

Heading: Shareholder use of corporate assets

Text: Judge Hunt found that Nicholas Ross used the corporate assets of Nerox Power and Nerox Energy for his personal benefit by: naming his family trusts as beneficiaries in a deed of trust encumbering the Jonesville coal mine lease, which was Nerox Power's only asset; using Nerox Power's coal lease as collateral for a $300,000 loan (increasing to $500,000 when interest is included) that was used to pay the operating expenses of Nerox Energy; and improving his own financial situation as the principal shareholder in Nerox Energy, and by extension in Nerox Power, through converting the debt of those two companies into shares in what he knew to be an essentially insolvent corporation. These actions alone do not clearly indicate that Nerox Power was an instrumentality of Ross. Because not all factors in the Uchitel test need to be satisfied to institute equitable subordination, we decline to determine whether or not the actions of Ross constitute the use of corporate assets for one's own personal gain.