Court Opinion

ID: 2668997
Source: CourtListenerOpinion
Date Created: 2014-04-05 05:17:50.251725+00
Date Added: 2024-06-11T13:02:41.116522
License: Public Domain

Case: 13-11027          Document: 00512585436              Page: 1   Date Filed: 04/04/2014

            IN THE UNITED STATES COURT OF APPEALS
                     FOR THE FIFTH CIRCUIT   United States Court of Appeals
                                                      Fifth Circuit

                                                                                     FILED
                                                                                   April 4, 2014
                                            No. 13-11027
                                                                                  Lyle W. Cayce
                                                                                       Clerk

IN THE MATTER OF: MARANATHA CONSTRUCTION COMPANY,

                                                          Debtor

------------------------------------------------------------------------

CLYDE W. COLLINS; BETTY J. COLLINS,

                                                          Appellants
v.

CAREY D. EBERT; HOWARD E. WATSON, III; SYDNEY WATSON;
MARANATHA ROOFING COMPANY,

                                                          Appellees

                      Appeal from the United States District Court
                           for the Northern District of Texas
                                 USDC No. 4:13-CV-210

Before SMITH, BENAVIDES, and CLEMENT, Circuit Judges.
PER CURIAM:*

        *Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
    Case: 13-11027     Document: 00512585436     Page: 2   Date Filed: 04/04/2014

                                  No. 13-11027

      The present appeal involves a dispute as to whether certain veil-piercing
claims against a bankrupt corporation are the property of the Estate under 11
U.S.C. § 541(a)(1). Whether a cause of action is owned by a bankrupt estate is
a question of law that the Court reviews de novo. In re Seven Seas Petrol., Inc.,
522 F.3d 575, 583 (5th Cir. 2008). We affirm for the following reasons:
      The disputed claims are rooted in allegations that the debtor
fraudulently transferred assets to a new corporation and then failed to disclose
the existence of that corporation. Consequently, the veil-piercing action is an
attempt to recover the property of the estate, and thus must be brought by the
bankruptcy trustee. In re Moore, 608 F.3d 253, 259 (5th Cir. 2010); In re
MortgageAmerica Corp., 714 F.2d 1266, 1275 (5th Cir. 1983).
      To the extent that the veil-piercing action arises out of allegations that
shareholders of the debtor “misused the corporat[e] form” and rendered the
debtor unable to meet its financial obligations, those claims are the property
of the estate. In re S.I. Acquisition, Inc., 817 F.2d 1142, 1152 (5th Cir. 1987).
      The creditors at bar have not identified any other claim they might own.
Although they list a few distinct facts unique to their circumstances, they have
not alleged any personal harm arising out of those unique facts. Instead, the
only harm alleged is the same general harm suffered by all creditors. In re
Schimmelpenninck, 183 F.3d 347, 359–60 (5th Cir. 1999).
      The authorities relied upon by the creditors are inapposite. See generally
Shandong Yinguang Chem. Indus. v. Potter, 607 F.3d 1029 (5th Cir. 2010); JNS
Aviation, Inc. v. Nick Corp., 418 B.R. 898 (N.D. Tex. 2009). In Shandong, this
Court expressly did “not address [who] owned the right to pierce the corporate
veil.” 607 F.3d at 1036. In JNS Aviation, the trustee chose not to pursue the
disputed action, leaving the presiding court with discretion to allow individual
                                        2
    Case: 13-11027     Document: 00512585436      Page: 3   Date Filed: 04/04/2014

                                  No. 13-11027

creditors to proceed with associated claims. 418 B.R. at 904. In the present
case, the Trustee is asserting the veil-piercing action on behalf of all creditors,
to ensure that they remain “on a level playing field, with like-situated
claimants being treated equally.”       Schimmelpenninck, 183 F.3d at 351.
AFFIRMED.

                                        3