Where creditors, who were victims defrauded by a Ponzi scheme, sought to collect on judgments against defendants by levying assets belonging to an individual defendant’s wife, the district court did not err in granting summary judgment to the defendants on the claim seeking to pierce the corporate veil and reach assets that once belonged to the defendants as a married couple, and the bankruptcy court correctly determined that the individual defendant did not own 50 percent of the trust as a settlor, so the allegation that he fraudulently transferred his share to his wife necessarily failed.
Opinion concurring in part by Colloton, J.: “In an effort to execute their judgment against Vertical LLC on assets owned by Kathleen Reuter, the creditors make a two-step argument. First, the creditors contend that the court should pierce Vertical’s veil to reach the assets of a tortfeasor partnership that was formed by Nathan Reuter and Daryl Brown. Second, they maintain that Nathan and Kathleen Reuter owned Nathan’s share in the tortfeasor partnership as tenants by the entirety, so that Kathleen is liable for the debts of the tortfeasor partnership. The court concludes that the second step fails and does not address the first. I do not join the court’s rationale on step two, but conclude that the argument fails at step one.”
Judgment is affirmed.
Cutcliff v. Reuter (MLW No. 71648/Case No. 17-1465 – 12 pages) (U.S. Court of Appeals, 8th Circuit, Gruender, J.) Appealed from U.S. District Court, Western District of Missouri, Laughrey, J. (David Gregory Brown, Columbia, argued for appellant) (James F.B. Daniels, Kansas City, Missouri, and Thomas M. Harrison, Columbia, argued for appellees).
Read the full text of this opinion. (PDF)