Usacm Liquidating Trust v. Deloitte & Touche, Llp

MEMORANDUM

On April 13, 2006, USA Commercial Mortgage Company (“USACM”) filed for bankruptcy in the United States Bankruptcy Court for the District of Nevada. USACM’s confirmed Chapter 11 plan created a bankruptcy litigation trust, USACM Liquidating Trust (the “Trust”), for purposes of pursuing USACM’s claims for the benefit of holders of allowed unsecured claims in USACM’s bankruptcy. On April 11, 2008, the Trust sued USACM’s former outside auditor, Deloitte & Touche LLP, alleging that Deloitte wrongfully issued unqualified audit opinions for fiscal years 2000 and 2001, concealing the misappropriations of USACM’s funds through two allegedly fraudulent schemes perpetrated by Thomas Hantges and Joseph Milanowski (the owners and controllers of USACM). The charged misappropriations caused USACM to sustain millions of dollars in losses and required its bankruptcy filing.

The Trust appeals from the district court’s summary judgment in favor of De-loitte. We have jurisdiction under 28 U.S.C. § 1291 , and we affirm.

The district court properly granted summary judgment to Deloitte on the ground that the misconduct of Hantges and Mila-nowski must be imputed to USACM under Nevada’s “sole…