Court Opinion

ID: 9954049
Source: CourtListenerOpinion
Date Created: 2024-03-25 17:01:05.662895+00
Date Added: 2024-06-11T08:11:46.329246
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

SIKOUSIS LEGACY, INC.,                   No. 23-15245

      Plaintiff-Appellant,             D.C. No. 3:22-cv-
                                         03273-CRB
BAHLA BEAUTY, INC.; K
INVESTMENTS, INC.,
                                           OPINION
      Intervenor-Plaintiffs-
      Appellants,

 v.

B-GAS LIMITED, AKA Bepalo LPG
Shipping Ltd.; B-GAS A/S;
BERGSHAV SHIPPING LTD.; B-
GAS HOLDING LTD.; BERGSHAV
AFRAMAX LTD.; BERGSHAV
SHIPHOLDING A/S; BERGSHAV
INVEST A/S; LPG INVEST A/S;
ATLE BERGSHAVEN,

      Defendants-Appellees.

      Appeal from the United States District Court
        for the Northern District of California
      Charles R. Breyer, District Judge, Presiding
2              SIKOUSIS LEGACY, INC. V. B-GAS LIMITED

            Argued and Submitted February 13, 2024
                   San Francisco, California

                      Filed March 25, 2024

     Before: Carlos T. Bea, David F. Hamilton, * and Morgan
                    Christen, Circuit Judges.

                      Opinion by Judge Bea

                          SUMMARY **

                            Admiralty

    The panel affirmed the district court’s order vacating
plaintiffs’ quasi in rem attachment of a vessel owned by
Bergshav Aframax Ltd., a defendant in an admiralty action
seeking fulfillment of arbitration awards.
    The arbitration awards, arising from a contract dispute,
were owed to plaintiffs by a different corporate entity, B-Gas
Ltd., later renamed Bepalo. Plaintiffs sought to “pierce the
corporate veil” of Bepalo and hold Aframax liable for the
arbitration awards on a theory that Aframax and Bepalo were
alter egos.

*
 The Honorable David F. Hamilton, United States Circuit Judge for the
U.S. Court of Appeals for the Seventh Circuit, sitting by designation.
**
  This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
            SIKOUSIS LEGACY, INC. V. B-GAS LIMITED           3

    The panel held that the district court did not abuse its
discretion when it vacated the pre-judgment attachment of
the vessel. Adopting a probable cause standard, and
applying federal common law, the panel affirmed the district
court’s conclusion that plaintiffs failed to show a reasonable
probability of success on their veil piercing theory.

                         COUNSEL

George A. Gaitas (argued) and Jonathan M. Chalos, Gaitas
& Chalos PC, Houston, Texas, for Plaintiffs-Appellants.
Keith B. Letourneau (argued) and Zachary R. Cain, Blank
Rome LLP, Houston, Texas for Defendants-Appellees.

                         OPINION

BEA, Circuit Judge:

    Plaintiff-Appellant Sikousis Legacy, Inc. and Plaintiffs-
in-Intervention Bahla Beauty, Inc. and K Investments, Inc.
(collectively, “Plaintiffs”) appeal the district court decision
that vacated their quasi in rem maritime attachment of the
vessel M/T Berica (“Berica”), which is owned by
Defendant-Appellee Bergshav Aframax, Ltd. (“Aframax”).
The vessel was attached pursuant to Rule B of the Federal
Rules of Civil Procedure Supplemental Rules for Admiralty
or Maritime Claims and Asset Forfeiture Actions to fulfill
arbitration awards, arising from a contract dispute, owed to
Plaintiffs by a different corporate entity, B-Gas Ltd. (later
renamed “Bepalo”). Plaintiffs sought to “pierce the
corporate veil” of Bepalo and hold Aframax liable for the
4              SIKOUSIS LEGACY, INC. V. B-GAS LIMITED

arbitration awards owed to Plaintiffs by Bepalo on a theory
that Aframax and Bepalo are alter egos. Under Plaintiffs’
theory, Aframax’s assets—including the Berica—were
available to satisfy the awards.
    Aframax opposed Plaintiffs’ claims by making a
restricted appearance under Rule E(8) 1 and moved to vacate
the attachment under Rule E(4)(f). The district court found
Plaintiffs failed to show probable cause that they would
prevail on their theory of corporate veil piercing. The
district court granted Aframax’s motion to vacate the
attachment, and Plaintiffs timely appealed.
    We conclude the district court did not abuse its discretion
when it vacated the pre-judgment attachment of the Berica
after Rule E(4)(f) proceedings. Plaintiffs failed to show a
reasonable probability of success on their corporate veil
piercing theory when confronted with Aframax’s evidence
that the Bergshav Group, 2 the owner of the attached Berica,
did not dominate and control Bepalo, the debtor under the

1
  Rule E(8) defines a “restricted appearance” as: “An appearance to
defend against an admiralty and maritime claim with respect to which
there has issued process in rem, or process of attachment and
garnishment, [which appearance is] expressly restricted to the defense of
such claim, and . . . is not an appearance for the purposes of any other
claim with respect to which such process is not available or has not been
served.”
2
  We use the term “Bergshav Group” to refer to the corporate entities B-
Gas A/S, Bergshav Shipping Ltd., B-Gas Holding Ltd., Aframax,
Bergshav Shipholding A/S, Bergshav Invest A/S, LPG Invest A/S, and
the individual Atle Bergshaven, all of whom are Defendants-Appellees.
B-Gas Ltd. was renamed Bepalo LPG Shipping Ltd., but we refer to it
exclusively as “Bepalo” for consistency. Aframax, the owner of the
attached Berica, is the only entity of the Bergshav Group that has entered
an appearance in this case.
              SIKOUSIS LEGACY, INC. V. B-GAS LIMITED                   5

arbitration awards.       Therefore, the district court’s
determination that Plaintiffs failed to meet their burden was
logical and supported by record evidence. The issue whether
Bepalo—the only entity against which Plaintiffs have
arbitration awards—was dominated and controlled by the
Bergshav Group was permissibly determined in favor of
Aframax and is dispositive. Hence, we affirm.
    I. BACKGROUND
      A. Contractual Dispute and Bergshav Group
         Restructuring 3
    In May 2020, the corporation Bepalo had three
shareholders: Bergshav Shipping Ltd. (51%), Pareto
Maritime Secondary Opportunity Fund AS 4 (“Pareto”)
(39%), and Lorentzens Skibs AS (10%). Bergshav Shipping
Ltd. is a wholly owned subsidiary of Bergshav Shipholding
AS. Bergshav Shipholding AS has two shareholders: Atle
Bergshaven and Bergshav AS, which is jointly owned by
two persons: Atle and Ebbe Bergshaven.
    At all relevant times, Bepalo had seven directors, three
of whom were Atle Bergshaven, Panagiotis Ioannou, and
Vryonis Kyperesis. Those three directors were also directors
of Bergshav Shipping Ltd. and its wholly owned subsidiary,
Aframax. Bepalo’s other four directors included Richard

3
 We attach an Appendix to this opinion with two tables, which Plaintiffs
provided to the district court. These tables reflect the Bergshav Group
corporate structures before and after the relevant restructuring. Aframax
does not dispute the accuracy of these tables.
4
  “AS” is an abbreviation for the Norwegian word “aksjeselskap,” which
translates to the English word “incorporated.”           Aksjeselskap,
CAMBRIDGE         DICTIONARY,       NORWEGIAN-ENGLISH DICTIONARY,
https://dictionary.cambridge.org/dictionary/norwegian-
english/aksjeselskap (2023) [https://perma.cc/R7N7-UAGE].
6           SIKOUSIS LEGACY, INC. V. B-GAS LIMITED

Jansen (on behalf of Pareto), Nicolai Lorentzen (on behalf of
Lorentzens Skibs AS), and two other Bergshav Group
directors.
    Beginning in 2014, Plaintiffs chartered liquid petroleum
gas carrier vessels to Bepalo for Bepalo’s use in transporting
gas. Citing a market decline in the first quarter of 2020 in
response to the COVID-19 pandemic, Bepalo contacted
Plaintiffs in May 2020 and requested a significant six-month
reduction in daily hire rates and a two-year credit period for
repayment of the reduction without additional interest.
Plaintiffs rejected this request.
    Beginning in June 2020, the Bergshav Group
commenced a restructuring. B-Gas Holding Ltd. was
incorporated in Cyprus as a new entity, wholly owned by
Bergshav Shipholding AS. LPG Invest AS was incorporated
in Norway as a new entity with the same three shareholders
as Bepalo: Bergshav Invest AS (70%)—which is wholly
owned by Bergshav Shipholding AS—Lorentzens Skibs AS
(15%), and Pareto (15%). LPG Invest AS had three
directors, all of whom were directors of Bepalo: Atle
Bergshaven, Richard Jansen (on behalf of Pareto), and
Nicolai Lorentzen (on behalf of Lorentzens Skibs AS).
    As these actions were taken, the directors of Bergshav
Shipping Ltd. held a meeting at which Andreas Hannevik,
the Chief Financial Officer of Bergshav Shipholding AS,
presented to the Board his restructuring proposal. In
Hannevik’s declaration submitted to the district court by
Aframax, he explained his plan had two parts: (1) sell
Bergshav Shipping Ltd.’s 51% share of Bepalo to B-Gas
Holding Ltd. for $1, a nominal price that reflected the “risk
of loss and the potential future failure of the company,” and
(2) sell Aframax to Bergshav Shipholding AS. The purpose
            SIKOUSIS LEGACY, INC. V. B-GAS LIMITED          7

of the restructuring was to “confine the risk of Bepalo’s
potential insolvency” and “to separate the various assets and
risks better.” The directors voted to approve part one, the
sale of Bergshav Shipping Ltd.’s 51% share of ownership in
Bepalo to B-Gas Holding Ltd., but rejected part two, the sale
of Aframax.
     Later in June 2020, the directors of LPG Invest AS, who
were also directors of Bepalo, authorized LPG Invest AS to
enter into restructuring agreements in which Bepalo would
sell four vessels it owned to LPG Invest AS, and LPG Invest
AS would lease those vessels back to Bepalo; this
arrangement allowed Bepalo to exchange assets (its vessels)
for liquidity (LPG Invest AS’s cash). That same day, the
directors of Bepalo, including the three common directors of
LPG Invest AS, approved Bepalo’s entry into these
agreements. Plaintiffs allege Bepalo did not disclose the sale
of the vessels to Plaintiffs, as required by their charter
agreements.
     In September and October 2020, Plaintiffs allege Bepalo
paid only 50% of the amount due in Plaintiffs’ invoices.
Plaintiffs commenced arbitration proceedings against
Bepalo under their charter agreements. On October 13,
2020, Plaintiffs received a letter from “BEPALO LPG
Shipping Ltd (formerly known as B-Gas Limited[)].” The
letter stated that due to the COVID-19 pandemic, Bepalo had
declared insolvency in Cyprus, was terminating its charter
agreements, and would close its business that day. Plaintiffs
successfully pursued their arbitration claims and obtained
awards totaling about $10 million USD against Bepalo.
8              SIKOUSIS LEGACY, INC. V. B-GAS LIMITED

       B. Procedural History
    To satisfy Plaintiffs’ arbitration judgments against
Bepalo, 5 Plaintiffs commenced admiralty proceedings
against the Bergshav Group under Rule B through
attachment of the vessel Berica in June 2022 in the Northern
District of California. 6 Because the Berica is owned by
Aframax, Plaintiffs based their attachment of the Berica on
a theory of alter ego liability. Plaintiffs alleged that Aframax
was involved in the Bergshav Group’s scheme to “strip
[Bepalo] of all of its fixed assets” and “put [Bepalo] out of
business.” Hence, according to Plaintiffs, the Bergshav
Group, as shareholders of Bepalo, should be held liable for
Bepalo’s debt, and, for purposes of satisfying the debt,
Aframax’s corporate character should be ignored.
    As noted, Aframax entered a restricted appearance under
Rule E(8) and moved to vacate the attachment under Rule
E(4)(f), arguing that Aframax, which is wholly owned by the
Bergshav Group, was not the alter ego of Bepalo and
therefore was not liable for Bepalo’s debts. Plaintiffs
opposed the motion, and a hearing was held on July 29,
2022. The district court continued the hearing, ordered
limited discovery, and ordered supplemental briefing.

5
  As Aframax noted in its briefing, this is not Plaintiffs’ first attempt to
satisfy their arbitration awards against the Bergshav Group. See K Invs.,
Inc. v. B-Gas Ltd., No. 21-40642, 2022 WL 964210 (5th Cir. Mar. 30,
2022) (per curiam; unpublished opinion) (affirming district court’s
vacatur of attachment of the vessel M/T Bergitta where Plaintiffs failed
to comply with Rule B because their complaint was not properly
verified).
6
 The parties do not dispute that the Berica “was released from the [U.S.
Marshals’] custody after only a day or so, with Sikousis agreeing to
accept a letter of undertaking from Aframax’s P&I Club as substitute
security for the vessel.”
              SIKOUSIS LEGACY, INC. V. B-GAS LIMITED                 9

Despite the opportunity for further discovery, Plaintiffs
chose not to take depositions of any Bergshav Group
representatives (including its directors and officers) or
Bepalo’s minority shareholder representatives. According
to the district court, Plaintiffs “just briefly addressed the
issue of Bepalo’s independence in their supplemental
brief.” 7
    On January 19, 2023, the district court granted
Aframax’s motion to vacate. In its decision, the district court
noted that, though Rule E(4)(f) provides that the plaintiff has
the burden of demonstrating why attachment should not be
vacated when attachment is challenged, the Ninth Circuit has
not articulated the standard that applies to that issue.
Relying on other district court decisions within this Circuit,
the district court applied a probable cause standard, requiring
Plaintiffs to demonstrate that they are reasonably likely to
prevail on the merits of their veil-piercing claim.
    On the merits, the district court ruled that Plaintiffs’ alter
ego claim of veil piercing failed at two essential points: (1) at
the first link connecting Bepalo to the Bergshav Group; and
(2) at the last link connecting Aframax to the alleged fraud.
On the first point, the district court found that Plaintiffs
failed to demonstrate that Bepalo was dominated and
controlled by the Bergshav Group. To reach this conclusion,
the district court relied on Bepalo’s Shareholders’
Agreement—which required the approval of a minority,
non-Bergshav Group shareholder director for certain
transactions, including the sale of vessels as occurred here—

7
  On appeal, Plaintiffs do not explain why they chose not to take
depositions and maintain they “diligently pursued documentary
discovery through interrogatories, requests for admissions and requests
for production of documents.”
10           SIKOUSIS LEGACY, INC. V. B-GAS LIMITED

and a declaration of Lorentzen, a minority shareholder and
director of Bepalo who voted to approve the relevant
transactions. The district court found that this evidence
supported Aframax’s position that Bepalo was sufficiently
independent of the Bergshav Group such that Aframax, as a
wholly owned subsidiary of the Bergshav Group, was not an
alter ego of Bepalo. The district court also rejected
Plaintiffs’ single business enterprise theory of veil piercing
because Plaintiffs did not argue Aframax was directly used
for a fraudulent purpose. Plaintiffs timely appealed the
district court’s order, which vacated attachment of the
Berica.
 II. JURISDICTION AND STANDARD OF REVIEW
    We have jurisdiction over this appeal under 28 U.S.C.
§ 1291. See Swift & Co. Packers v. Compania Colombiana
Del Caribe, S.A., 339 U.S. 684, 688–89 (1950); Interpool
Ltd. v. Char Yigh Marine (Panama) S.A., 890 F.2d 1453,
1457–58 (9th Cir. 1989), amended on other grounds, 918
F.2d 1476 (9th Cir. 1990). We review an “order vacating [a]
maritime attachment for abuse of discretion,” and “review
any legal conclusions underpinning the order de novo.”
Equatorial Marine Fuel Mgmt. Servs. Pte Ltd. v. MISC
Berhad, 591 F.3d 1208, 1210 (9th Cir. 2010). A district
court abuses its discretion if it failed to identify the correct
legal standard or if its “application of the correct legal
standard was (1) ‘illogical,’ (2) ‘implausible,’ or (3) without
‘support in inferences that may be drawn from the facts in
the record.’” United States v. Hinkson, 585 F.3d 1247, 1262
(9th Cir. 2009) (en banc) (quoting Anderson v. Bessemer
City, 470 U.S. 564, 577 (1985)).
            SIKOUSIS LEGACY, INC. V. B-GAS LIMITED          11

  III. DISCUSSION
    The district court did not abuse its discretion when it
determined Plaintiffs failed to satisfy their burden of
establishing a reasonable probability of success on their veil
piercing theories. Plaintiffs failed to contradict Aframax’s
evidence that the Bergshav Group, Aframax’s parent
corporate group, did not dominate Bepalo. The transactions
at issue required approval from at least one minority
shareholder director of Bepalo, and one of those minority
shareholders declared that he exercised his independent
judgment in approving the transactions. Plaintiffs failed to
provide evidence to the contrary. Consequently, we affirm
the district court’s decision.
     A. Pre-Judgment Attachment
    As a preliminary matter, we address an unresolved issue
raised by the district court: the standard that applies to
determine whether to continue pre-judgment maritime
attachments. “Under Rule B of the Supplemental Admiralty
Rules, [a] plaintiff may attach a defendant’s property if four
conditions are met: (1) Plaintiff has a valid prima facie
admiralty claim against the defendant; (2) defendant cannot
be found within the district; (3) property of the defendant can
be found within the district; and (4) there is no statutory or
maritime law bar to the attachment.” Equatorial Marine,
591 F.3d at 1210. Rule E(4)(f), titled “Procedure for Release
From Arrest or Attachment,” provides: “Whenever property
is arrested or attached, any person claiming an interest in it
shall be entitled to a prompt hearing at which the plaintiff
shall be required to show why the arrest or attachment should
not be vacated or other relief granted consistent with these
rules.” A plaintiff indisputably has the burden of justifying
12           SIKOUSIS LEGACY, INC. V. B-GAS LIMITED

continued attachment under Rule E(4)(f).              Equatorial
Marine, 591 F.3d at 1210.
    We adopt the standard applied by the district court—
probable cause to believe the plaintiff will prevail on the
merits of its admiralty claim. Several district courts within
this Circuit have used this standard, other circuits have
adopted a similar standard, and such a standard is consistent
with the procedural posture of Rule E(4)(f) proceedings.
    Though Rule E(4)(f) does not provide the standard by
which to measure a plaintiff’s burden, “the prevailing test [in
this Circuit] appears to be a ‘probable cause’ standard that
requires Plaintiffs to demonstrate the evidence shows a fair
or reasonable probability that Plaintiffs will prevail on their
alter-ego claim.” OS Shipping Co. v. Glob. Mar. Tr. Priv.
Ltd., No. 11-CV-377-BR, 2011 WL 1750449, at *5 (D. Or.
May 6, 2011) (emphasis added); see, e.g., Benicia Harbor
Corp. v. M/V IDA LOUISE, No. 2:23-cv-00205-DJC-CKD,
2023 WL 7092230, at *2 (E.D. Cal. Oct. 26, 2023);
Kanaway Seafoods, Inc. v. Pac. Predator, No. 3:22-cv-
00027-JMK-KFR, 2022 WL 19569230, at *2 (D. Alaska
July 29, 2022); Sea Prestigio, LLC v. M/Y Triton, No.
10cv2412-BTM (AJB), 2010 WL 5376255, at *1 (S.D. Cal.
Dec. 22, 2010); Del Mar Seafoods Inc. v. Cohen, No. C 07-
02952 WHA, 2007 WL 2385114, at *3 (N.D. Cal. Aug. 17,
2007).
    The probable cause standard as articulated by district
courts in this Circuit is consistent with other circuits. Before
the 1985 amendment to the Rule, the Fourth Circuit adopted
the probable cause standard in the pre-judgment maritime
attachment context, see Amstar Corp. v. S/S ALEXANDROS
T., 664 F.2d 904, 912 (4th Cir. 1981), and it continues to
apply the probable cause standard, see Addax Energy SA v.
            SIKOUSIS LEGACY, INC. V. B-GAS LIMITED          13

M/V Yasa H. Mulla, 987 F.3d 80, 88 (4th Cir. 2021). After
Rule E was amended in 1985, the Third Circuit described the
applicable standard as “whether there were reasonable
grounds for issuing the arrest warrant.” Salazar v. Atl. Sun,
881 F.2d 73, 79 (3d Cir. 1989) (emphasis added).
    The “probable cause” or “reasonable probability of
success” standard is logical and consistent with Ninth Circuit
precedent. In Equatorial Marine, the defendant purchased
bunkers to fuel its ships from the plaintiff through an
intermediary. 591 F.3d at 1209–10. When the intermediary
became insolvent and failed to pay the plaintiff’s bill, the
plaintiff sued the defendant under theories of breach of
contract and unjust enrichment and attached the defendant’s
ship. Id. at 1210. The defendant moved to vacate the
attachment under Rule E(4)(f), and the district court granted
the motion. Id. In affirming the district court’s decision, we
explained that a plaintiff is not “required to prove its case
just to defeat the motion to vacate.” Id. at 1211. But the
plaintiff did have the “burden of showing that it had a valid
prima facie . . . claim.” Id. “Once [the defendant] came
forward with evidence showing that it contracted with [the
intermediary], not [the plaintiff], and paid [the intermediary]
for the bunkers, [the plaintiff] needed to do something to
contradict this showing. Because [the plaintiff] failed to do
this, the district court properly vacated the attachment.” Id.
    As Equatorial Marine confirms, a plaintiff need not
prove its case at the Rule E(4)(f) stage. A standard higher
than probable cause, such as a preponderance standard,
would tend to require just that. See Williamson v. Recovery
Ltd. P’ship, 542 F.3d 43, 53 (2d Cir. 2008) (“[T]his decision
does not mean that Plaintiffs’ allegations, if proven, are
insufficient to prove mismanagement, breach of duty to
investors, and misuse of corporate entities as to these other
14            SIKOUSIS LEGACY, INC. V. B-GAS LIMITED

corporate Defendants; rather, it means that the evidence
provided to the district court is insufficient at this stage to
demonstrate that Plaintiffs have the requisite prima facie
admiralty claim . . . .” (internal quotation marks omitted));
Salazar, 881 F.2d at 79–80 (“The post-arrest hearing is not
intended to resolve definitively the dispute between the
parties, but only to make a preliminary determination
whether there were reasonable grounds for issuing the arrest
warrant, and if so, to fix an appropriate bond.”).
    For these reasons, we conclude that where a party
challenges a plaintiff’s Rule B attachment at a Rule E(4)(f)
hearing, the plaintiff has the burden of establishing probable
cause to continue attachment of the property. A plaintiff
meets his burden by establishing a reasonable probability of
success as to each element of his claim. A reasonable
probability requires less than a preponderance but requires
more than a mere possibility of success. 8 Cf. Nken v. Holder,
556 U.S. 418, 434–35 (2009) (requiring more than a mere
possibility of success on the merits and of irreparable injury
to stay enforcement of a judgment). Where the defendant
who requested the Rule E(4)(f) hearing provides evidence
that undermines an essential element of a plaintiff’s claim,
the plaintiff then has the burden to submit evidence to the
contrary or explain why the defendant’s evidence is not
material to survive a motion to vacate the attachment. See
Equatorial Marine, 591 F.3d at 1211.

8
 Though this standard permits a significant range of probabilities within
which a court could determine a plaintiff had shown a reasonable
probability of success, the range of permissible outcomes gives district
courts discretion, the exercise of which is reviewed for an abuse of that
discretion. See Equatorial Marine, 591 F.3d at 1210.
              SIKOUSIS LEGACY, INC. V. B-GAS LIMITED                 15

    Because we adopt the probable cause standard, the
district court did not err in applying this standard below. See
Hinkson, 585 F.3d at 1262.
      B. Piercing the Corporate Veil
    The district court did not abuse its discretion when it
determined Plaintiffs had not met their burden of
demonstrating probable cause to pierce Bepalo’s corporate
veil. Plaintiffs failed to provide evidence to contradict
record evidence that Bepalo was not dominated and
controlled by the Bergshav Group, the owner of the attached
Berica, which was necessary to pierce the corporate veil and
hold any entity within the Bergshav Group liable for
Bepalo’s debts. 9
    Federal courts sitting in admiralty apply federal common
law when examining corporate identity. See Pac. Gulf
Shipping Co. v. Vigorous Shipping & Trading S.A., 992 F.3d
893, 897 (9th Cir. 2021). The general rule is that a parent
entity and its subsidiaries are separate entities. See Harris
Rutsky & Co. Ins. Servs. v. Bell & Clements Ltd., 328 F.3d
1122, 1134 (9th Cir. 2003). “To pierce the corporate veil, a
party must show that (1) the controlling corporate entity
exercises total domination of the subservient corporation, to
the extent that the subservient corporation manifests no
separate corporate interests of its own, (2) injustice will
result from recognizing the subservient entity as a separate
entity, and (3) the controlling entity had a fraudulent intent
or an intent to circumvent statutory or contractual
obligations.” Pac. Gulf Shipping, 992 F.3d at 898 (cleaned

9
  Because we conclude Plaintiffs failed to show probable cause to pierce
Bepalo’s corporate veil, we need not consider the parties’ arguments
regarding the requisite degree of Aframax’s involvement in the alleged
fraud to justify continued attachment of the Berica.
16           SIKOUSIS LEGACY, INC. V. B-GAS LIMITED

up). The first element has also been described as requiring
a “unity of interest” between the entities or that the
subsidiary is a “mere instrumentality” of the parent. See
Harris Rutsky, 328 F.3d at 1134–35. We have recently
articulated the following non-exhaustive list of indicia courts
use to determine to pierce the corporate veil:

        (1) disregarding corporate formalities such
        as, for example, in issuing stock, electing
        directors, or keeping corporate records;
        (2) capitalization that is inadequate to ensure
        that the business can meet its obligations;
        (3) putting funds into or taking them out of
        the corporation for personal, not corporate,
        purposes; (4) overlap in ownership, directors,
        officers, and personnel; (5) shared office
        space, address, or contact information;
        (6) lack of discretion by the allegedly
        subservient entity; (7) dealings not at arms-
        length between the related entities; (8) the
        holding out by one entity that it is responsible
        for the debts of another entity; and (9) the use
        of one entity’s property by another entity as
        its own.

Id. The presence of these indicia is instructive, but not
determinative of whether a court should pierce the corporate
veil; instead, courts must look to the “totality of the record
and circumstances” to determine whether the three elements
of the test are satisfied: domination, injustice, and ill intent.
See id.
   Here, the district court properly applied this test and
considered evidence Aframax provided demonstrating that
            SIKOUSIS LEGACY, INC. V. B-GAS LIMITED         17

Bergshav Shipholding AS, Aframax’s parent company, did
not dominate Bepalo.
    The record supports the district court’s determination
that Plaintiffs failed to establish the first element of total
domination.       Aframax filed a copy of Bepalo’s
Shareholders’ Agreement between Bergshav Shipping Ltd.,
Lorentzens Skibs AS, and Pareto. The Agreement stated that
all major decisions, including the sale of vessels, required
approval of at least one of the two minority shareholder
directors. Aframax also submitted a declaration of Nicolai
Lorentzen, the minority shareholder and director who
represented Lorentzens Skibs AS at all relevant times. His
declaration confirmed that the Bergshav Group owned 51%
of Bepalo, and that Lorentzens Skibs AS held 10% of
Bepalo. Lorentzen also declared: “While the board was
unanimous in its decisions [related to the relevant
transactions], I can attest that I did not simply defer to the
position of Atle Bergshaven or any other board member – I
believe that each decision reached was appropriate based on
my own evaluation of the facts.” These facts support an
inference that Bepalo was not totally dominated or
controlled by the Bergshav Group because Lorentzen
declared that he exercised independent judgment when he
approved the transactions on behalf of a minority
shareholder.
    Despite the opportunity for discovery and to depose
Bergshav Group representatives, Plaintiffs failed to provide
evidence that contradicted Lorentzen’s explanation that
minority shareholders, who were not Bergshav Group
representatives, exercised significant control over Bepalo’s
challenged transactions. Further, Plaintiffs failed to oppose
Lorentzen’s declaration or to make a legal argument that
would undermine the relevance of these facts, and instead
18           SIKOUSIS LEGACY, INC. V. B-GAS LIMITED

made the conclusory assertion that “domination and control
of [Bepalo] by the Bergshaven Group . . . [was]
indisputable” without an evidentiary basis for such assertion.
    Accordingly, the district court’s determination that
Plaintiffs failed to meet their burden of demonstrating a
reasonable probability of success on their veil piercing
theory was not illogical or implausible and was supported by
facts in the record. See Hinkson, 585 F.3d at 1262.
    On appeal, Plaintiffs misconstrue the district court’s
reasoning on this issue. Plaintiffs argue that the district court
required them to show that Bergshav Group owned “100%
of the shares” of Bepalo. That is incorrect. Nowhere did the
district court require Plaintiffs to establish total ownership to
prove total domination or that Bepalo and Aframax had a
unity of interest. Plaintiffs also argue that Aframax did not
provide evidence that the Shareholders’ Agreement was
followed or that it had binding effect after Bergshav
Shipping Ltd. transferred its 51% share of Bepalo to B-Gas
Holding Ltd. But it was Plaintiffs’ burden to defend
continued attachment as to such claims. And Plaintiffs do
not argue they requested, and were denied, discovery on the
validity of the Shareholders’ Agreement, nor do they
articulate a basis for believing their speculation would be
supported by evidence had they attempted to discover it.
    Further, Plaintiffs argue the district court excluded their
factual showing of domination and control from its
consideration. To this point, Plaintiffs essentially recount
the series of transactions that the Bergshav Group undertook
while restructuring. Plaintiffs argue they “did show in their
submissions to the District Court a plan and design,”
spearheaded by Bergshav Shipholding AS, “to establish a
new entity controlled by the shareholders of Bepalo (70% by
              SIKOUSIS LEGACY, INC. V. B-GAS LIMITED                19

the Bergshaven Group) in order to preserve the equity of the
shareholders” to Plaintiffs’ detriment. Accepting this point
as true, Plaintiffs omit any mention of the minority
shareholders—including Lorentzen, who declared that he
exercised his independent judgment in representing
Lorentzens Skibs AS when he voted to approve the relevant
transactions. Plaintiffs do not contend that they were denied
the opportunity to depose Lorentzen. They simply failed to
respond to Lorentzen’s declaration regarding his vote to
approve the corporate restructuring, even though it refutes
Plaintiffs’ assertion that the Bergshav Group had “total
domination” of Bepalo. See Pac. Gulf Shipping, 992 F.3d at
898.
    To be sure, the restructuring scheme at issue in this case
may not have been “above board,” as the district court noted.
But the Shareholders’ Agreement and Lorentzen’s
declaration are record evidence that support inferences of
Bepalo’s independence from the Bergshav Group. Thus, the
district court did not abuse its discretion when it found
Plaintiffs failed to meet their burden of demonstrating a
reasonable probability that Bepalo was dominated and
controlled by the Bergshav Group, as required to pierce the
corporate veil on any theory under Pacific Gulf Shipping.10
See 992 F.3d at 898; Equatorial Marine, 591 F.3d at 1211.
   To hold any member of the Bergshav Group liable for
Bepalo’s debts, Plaintiffs needed to pierce Bepalo’s

10
   Because we affirm the district court’s finding that Bepalo was
sufficiently independent of the Bergshav Group for purposes of piercing
Bepalo’s corporate veil, we need not discuss Plaintiffs’ alternative
“single business enterprise” theory, which Plaintiffs concede also
requires a “unity of interest” and ownership between the debtor company
and the company to be held liable.
20          SIKOUSIS LEGACY, INC. V. B-GAS LIMITED

corporate veil. Doing so required showing, at a minimum,
that the Bergshav Group dominated and controlled Bepalo.
Considering the record evidence before the district court, we
conclude the district court did not abuse its discretion in
finding Plaintiffs failed, at this preliminary stage of the
litigation, on that threshold issue.
 IV. CONCLUSION
    For the above reasons, we affirm the district court’s
decision granting Aframax’s motion to vacate attachment of
the Berica.
     AFFIRMED.
SIKOUSIS LEGACY, INC. V. B-GAS LIMITED   21

            APPENDIX
22   SIKOUSIS LEGACY, INC. V. B-GAS LIMITED