Leslie v. Hancock Park Capital II, L.P. (In Re Fitness Holdings International, Inc.)

MEMORANDUM

Sam Leslie, chapter 7 trustee (“Trustee”) for the bankruptcy estate of Fitness Holdings International, Inc. (the “Debt- or”), appeals from an order of the district court affirming the bankruptcy court’s order granting the Appellees’ motions to dismiss all claims. The Trustee seeks to recover a pre-bankruptcy transfer of approximately $12 million (the “Transfer”) from the Debtor to Hancock Park Capital II, LP (“Hancock Park”), the Debtor’s sole shareholder. The Transfer paid down prior advances from Hancock Park to the Debtor. The advances were evidenced by promissory notes totaling approximately $25 million. The Trustee argues that the notes did not create debt and that the pre-bankruptcy transfers were therefore equity infusions in disguise. Seeking to recover the Transfer, the Trustee brings claims of constructive and actual fraud, breach of fiduciary duties, and aiding and abetting breach of fiduciary duties. We have jurisdiction under 28 U.S.C. § 158 (d)(1) and 28 U.S.C. § 1291 , and we affirm.

We “review de novo a district court’s judgment on appeal from a bankruptcy court.” I.R.S. v. Snyder, 343 F.3d 1171, 1174 (9th Cir. 2003). We apply the same standard of…