Gould v. Dillard et al

Filing 3

ORDER adopting (doc. no. 1-61) Report and Recommendations issued by the Bankruptcy Judge on December 6, 2016; denying (doc. no. 1-8) Mustang's Motion for Summary Judgment; and granting in part and denying in part (doc. no. 1-9) Trustee's Motion for Summary Judgment (as more fully set out). Signed by Honorable Vicki Miles-LaGrange on 3/20/2017. (ks)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA
IN RE:
TOMAHAWK OIL AND GAS
MARKETING, LLC,
Debtor,
DOUGLAS GOULD, Trustee,
Plaintiff,
v.

BENJAMIN DILLARD,
TOMAHAK GATHERING, LLC,
HGM, LLC, and
MUSTANG GAS PRODUCTS, LLC,
Defendants.

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Case No. CIV-16-1455-M
BK Case No. 14-15055-SAH
ADV. PRO. 15-01220-SAH
Chapter 7

ORDER
On November 22, 2016, United States Bankruptcy Judge Sarah A. Hall issued a
Report and Recommendation on trustee Douglas Gould’s (“Trustee”) and defendant
Mustang Gas Products, LLC’s (“Mustang”) cross motions for summary judgment [docket
nos. 73 and 74]. In the Report and Recommendation, the Bankruptcy Judge recommended
the following:
1. Trustee is not entitled to summary judgment on his alter ego
claim because it is not supported by undisputed material[]
facts, and thus it involves factual questions that must be
resolved by the trier of fact;

2. Trustee is entitled to summary judgment on his claim for
avoidance of the Dillard Withdrawals from debtor
Marketing as actually fraudulent under Section
548(a)(1)(A); further, Trustee is entitled to summary
judgment allowing him to recover those withdrawals from
Dillard under Section 550(a) in an amount to be determined
at trial;
3. Absent a ruling on the alter ego status of the Corporations,
Trustee is not entitled to summary judgment on his claim
for avoidance of the Dillard Withdrawals from Gathering
or HGM under section 548(a)(1)(A) because those entities
are not debtors in bankruptcy.
4. Trustee is entitled summary judgment on his claim for
avoidance of the $400,000 in cash wire transferred from
Marketing to HGM as actually fraudulent under Section
548(a)(1)(A); further Trustee is entitled to summary
judgment allowing him to recover the $400,000 from HGM
as an initial transferee pursuant to Section 550;
5. Trustee is not entitled to summary judgment on his claim
for avoidance of the alleged transfer of Marketing’s
business or business opportunities to HGM as actually
fraudulent under Section 548(a)(1)(A) because he did not
submit sufficient undisputed material facts to support such
transfer or the potential value of what was allegedly
transferred;
6. Mustang is not entitled to summary judgment on its good
faith defenses under either Section 548(c) or Section 550(b)
because they are not supported by undisputed material[]
facts, and thus they involve factual questions that must be
resolved by the trier of fact; and
7. Trustee is entitled to summary judgment against Mustang
with respect to its affirmative defense under the Oklahoma
Oil and Gas Lien Act of 2010.
Report and Recommendation at 47-48.

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On December 6, 2016, Mustang filed its objection to the Report and
Recommendation, and on December 20, 2016, Trustee filed his response to Mustang’s
objection. Mustang lodges the following objections to the Report and Recommendation:
(1) the Bankruptcy Court erred by finding that the indirect benefit rule does not apply to
Trustee’s avoidance action based on actual fraud under §548(a)(1)(A); (2) the Bankruptcy
Court failed to address Mustang’s motion for summary judgment on Trustee’s avoidance
action based on constructive fraud under §548(a)(1)(B); (3) the Bankruptcy Court’s
conclusion that Trustee is entitled to summary judgment against HGM regarding the wire
transfers from Marketing to HGM is erroneous; (4) the Bankruptcy Court’s
recommendations are based on the faulty assumption that Superior is a creditor of
Tomahawk Marketing, which can only be true if the Court applies “Reverse Veil Piercing”
to impose alter ego liability; and (5) the Bankruptcy Court erroneously struck the Affidavit
of Mustang’s expert, Harry Potter.
Having reviewed this matter de novo, the Court:
(1) ADOPTS the through Report and Recommendation [docket no. 1-61] issued by
the Bankruptcy Judge on December 6, 2016;
(2) DENIES Mustang’s Motion for Summary Judgment and Brief in Support
[docket no. 1-8]; and
(3) GRANTS IN PART AND DENIES IN PART Trustee’s Motion for Summary
Judgment and Brief in Support [docket no. 1-9] as follows:
a. GRANTS Trustee’s Motion for Summary Judgment as to his claims that
Dillard’s withdrawals from Marketing were actually fraudulent under
Section 548(a)(1)(A) and, therefore, the Court finds that Trustee is
entitled to recover those withdrawals from Dillard under Section 550(a)
in an amount to be determined at trial.
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b. GRANTS Trustee’s Motion for Summary Judgment as to his claims for
avoidance of the $400,000 in cash wire transfer from Marketing to HGM
as actually fraudulent under Section 548(a)(1)(A) and, therefore, the
Court finds that Trustee is entitled to recover the $400,000 from HGM as
an initial transferee, pursuant to section 550.
c. GRANTS Trustee’s Motion for Summary Judgment against Mustang
with respect to Mustang’s affirmative defense under the Oklahoma Oil
and Gas Lien Act of 2010.
d. DENIES Trustee’s Motion for Summary Judgment on (1) his alter ego
claim; (2) his claim for avoidance of the Dillard Withdrawals from
Gathering or HGM under Section 548(a)(1)(A); and (3) his claim for
avoidance of the alleged transfer of Marketing’s business or business
opportunities to HGM as actually fraudulent under Section 548(a)(1)(A).
IT IS SO ORDERED this 20th day of March, 2017.

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