Alexander
Alexander v. Compton (In re Bonham)
Opinion
Lead Opinion
Thomas, J.
We must decide whether a bankruptcy court may order substantive consolidation of two non-debtor corporations, World Plus, Inc. and Atlantic Pacific Funding Corporation, with the bankruptcy estate of Chapter 7 debtor Raejean Bonham nunc pro tunc as of the filing date of the involuntary Chapter 7 petition. We have jurisdiction pursuant to 28 U.S.C. § 158 (d), and we reverse the decision of the district court and remand with instructions to affirm the bankruptcy court’s order of nunc pro tunc substantive consolidation.
*759 I
This appeal arises out of a failed Ponzi scheme 1 operated by debtor Raejean Bonham originally through a proprietorship known as “World Plus,” which she eventually incorporated as World Plus, Inc. (‘WPI”), and beginning in 1992, under the name of Atlantic Pacific Funding Corp. (“APFC”), a Nevada corporation. See In re Bonham, 226 B.R. 56, 61-63 (Bankr.D.Alaska 1998). The stated purpose of both WPI and APFC was to purchase frequent flier miles available from various airlines or third parties at a discount and use them to acquire airline tickets, which were then to be sold to the public at a substantial profit. See id.