USACM’s confirmed Chapter 11 plan created a bankruptcy litigation trust, USACM Liquidating Trust (the “Trust”), for purposes of pursuing USACM’s claims for the benefit of holders of allowed unsecured claims in USACM’s bankruptcy.
On April 11, 2008, the Trust sued USACM’s former outside auditor, Deloitte & Touche LLP, alleging that Deloitte wrongfully issued unqualified audit opinions for fiscal years 20, concealing the misappropriations of USACM’s funds through two allegedly fraudulent schemes 4 USACM LIQUIDATING TRUST V. The district court properly granted summary judgment to Deloitte on the ground that the misconduct of Hantges and Milanowski must be imputed to USACM under Nevada’s “sole actor” rule.1 Under Nevada law, the sole actor rule imputes an agent’s actions to the principal corporation “even if the agent totally abandons the corporation’s interest” when “the corporation and its agent are indistinguishable from each other.”2 See Glenbrook Capital Ltd. Dodds (In re Amerco Derivative Litig.), , 695–96 (Nev. The record before the district court demonstrated that, for all relevant purposes, Hantges and Milanowski utterly controlled and dominated USACM: they were the majority shareholders, owning collectively at least 83% of the stock at any given time prior to bankruptcy; held top management 1 At the time of the district court’s opinion, the Nevada Supreme Court had not yet issued its opinion in Glenbrook Capital Ltd. Dodds (In re Amerco Derivative Litig.), , 695–96 (Nev. However, the district court accurately predicted that the Nevada Supreme Court would do so. § 108(a) extends applicable limitations periods in the bankruptcy context up to an additional “two years after the order for relief” provided that the limitations period has “not expired before the date of the filing of the petition.” 6 USACM LIQUIDATING TRUST V.
D., MBA, Receiver UNITED STATES DISTRICT COURT DISTRICT OF NEVADA USACM LIQUIDATING TRUST, Civil Action No. PLACER COUNTY LAND SPECULATORS, LLC, aka PLACER COUNTY LAND INVESTORS, LLC; et al, Defendants Date: Time: Judge: November 29, 2011 a.m. 675] (the “Motion”), after a hearing on proper notice, the Court having considered the Motion and arguments, and good cause appearing, IT IS ORDERED that: 1. The Motion is granted; and The reporting requirements established in Local Rule 66-4 and the Order Appointing Receiver Authorizing the Receiver are hereby extended from 30 to 45 days.Appeal by the liquidating trust from the district court's summary judgment in favor of the defendant, debtor's former outside auditor, which the trust alleged had wrongfully issued unqualified audit opinions.The misconduct of the debtor's CEO and the president was imputed to the debtor under Nevada's "sole actor" rule. Dawson ORDER MODIFYING REPORTING REQUIREMENTS ESTABLISHED IN LOCAL RULE 66-4 AND THE ORDER APPOINTING RECEIVER Upon consideration of the Motion of Receiver for an Order Modifying Reporting Requirements Established in Local Rule 66-4 and the Order Appointing Receiver [Docket No. USACM Liquidating Trust (the Trust), the transferee of USACM’s assets, filed the underlying adversary proceeding against the Monacos alleging, inter alia, unjust enrichment. We review de novo the legal question whether the district court possessed the power to sanction Winthrop.