Double Bogey Lp v. Sylvester Enea

We must decide whether California’s alter ego doctrine can create a “fiduciary” relationship under the Bankruptcy Code.

I

This case arises from a dispute between two non-natural persons, Double Bogey, L.P. and Appian Construction, Inc., regarding Appian’s alleged mismanagement of Double Bogey’s investments in several real estate projects. However, we are not presented with the question of Appian’s liability. Rather, we consider the liability of the two natural persons who owned and operated it.

Appian was created by brothers Paul and Sylvester Enea, who served as its only shareholders and officers. The company managed several real estate development projects, including the two projects relevant to this case: 1221 Montieello, L.L.P., of which Appian was a General Partner, and Monterrosa, L.L.C., of which Appian was the Managing Member. Double Bogey invested approximately $4 million in Montieello as its Limited Partner, and approximately $1 million in Monterrosa as a non-managing member.

Double Bogey never recovered any of its investment in Monterrosa. It also did not receive profits to which it argues it was entitled from both Montieello and Monter-rosa. After Appian…