24-2504 In re: Kwok
United States Court of Appeals For the Second Circuit
August Term 2025
Argued: December 10, 2025 Decided: April 6, 2026
No. 24-2504
IN RE: KWOK
HO WAN KWOK,
Debtor,
MEI GUO,
Counter-Defendant-Appellant,
HK INTERNATIONAL FUNDS INVESTMENTS (USA) LIMITED, LLC,
Plaintiff-Counter-Defendant-Appellant,
v.
LUC A. DESPINS, Chapter 11 Trustee,
Defendant-Counter-Claimant-Appellee, UNITED STATES TRUSTEE,
Trustee. 1
Appeal from the United States District Court for the District of Connecticut No. 23-cv-458, Kari A. Dooley, Judge.
Before: CHIN, SULLIVAN, and LEE, Circuit Judges.
Mei Guo and HK International Funds Investments (USA) Limited, LLC (“HK”) – third parties in a Chapter Eleven bankruptcy filed by an individual debtor – appeal from a judgment of the United States District Court for the District of Connecticut (Dooley, J.) affirming the bankruptcy court’s conclusion that HK was an alter ego of the debtor and that HK’s assets therefore belonged to the bankruptcy estate. On appeal, Guo and HK argue that the Trustee did not have standing to assert the alter-ego claim on behalf of the bankruptcy estate’s creditors and that, in any event, HK was not the debtor’s alter ego.
As an initial matter, we conclude that we have jurisdiction to hear this appeal. Although the district court’s decision was not final when this appeal was filed, the Trustee agreed during oral argument to dismiss his remaining claims with prejudice, making the district court’s summary judgment decision an appealable final order. Turning to the merits, we agree with the district court that the Trustee has standing to assert an alter-ego claim on behalf of the creditors and that the only reasonable conclusion to be drawn from the record is that HK is the debtor’s alter ego. Accordingly, we AFFIRM the judgment of the district court.
AFFIRMED.
STEPHEN M. KINDSETH (James M. Moriarty, Daniel A. Byrd, on the brief), Zeisler & Zeisler, P.C., Bridgeport, CT, for Counter-
1 The Clerk of Court is respectfully directed to amend the caption as set forth above.
2 Defendant-Appellant and Plaintiff-Counter- Defendant-Appellant.
NICHOLAS BASSETT (Dennis M. Carnelli, Neubert, Pepe & Monteith, P.C., New Haven, CT, on the brief), Paul Hastings, LLP, Washington, D.C., for Defendants- Appellants.
RICHARD J. SULLIVAN, Circuit Judge:
Mei Guo and HK International Funds Investments (USA) Limited, LLC
(“HK”) – third parties in a Chapter Eleven bankruptcy filed by an individual
debtor – appeal from a judgment of the United States District Court for the District
of Connecticut (Dooley, J.) affirming the bankruptcy court’s conclusion that HK
was an alter ego of the debtor and that HK’s assets therefore belonged to the
bankruptcy estate. On appeal, Guo and HK argue that the Trustee did not have
standing to assert the alter-ego claim on behalf of the bankruptcy estate’s creditors
and that, in any event, HK was not the debtor’s alter ego.
As an initial matter, we conclude that we have jurisdiction to hear this
appeal. Although the district court’s decision was not final when this appeal was
filed, the Trustee agreed during oral argument to dismiss his remaining claims
with prejudice, making the district court’s summary judgment decision an
appealable final order. Turning to the merits, we agree with the district court that
3 the Trustee has standing to assert an alter-ego claim on behalf of the creditors and
that the only reasonable conclusion to be drawn from the record is that HK is the
debtor’s alter ego. Accordingly, we affirm the judgment of the district court.
I. BACKGROUND
This case involves a mega-yacht and a Pomeranian. Both allegedly belong
to the debtor in the underlying bankruptcy, the “self-declared multi-billionaire”
Ho Wan Kwok. J. App’x at 546. But while Kwok listed the Pomeranian as his
property in his bankruptcy petition, he claims not to own the yacht, a Cayman-
Islands-registered boat called the Lady May, which is worth tens of millions of
dollars.
The Lady May officially belongs to HK (one of the Appellants here), a limited
liability company whose only member is Kwok’s daughter, Mei Guo (the other
Appellant). HK has no place of business and its paperwork lists only Kwok’s
home and office addresses, the latter of which Kwok used for several other entities
that he controlled. HK also (i) has no revenue, bank accounts, officers, directors,
or employees; (ii) maintains no records, other than those related to the Lady May;
and (iii) “ha[s] no business purpose other than owning the Lady May” and a
smaller vessel called the Lady May II, which is worth roughly $1,000,000 and is
4 alternatively described as “another yacht” and “a small ‘runner’ boat for the Lady
May.” Sp. App’x at 44, 57, 77.
In 2020, one of Kwok’s creditors, Pacific Alliance Asia Opportunity Fund
L.P. (“PAX”), sought to enforce a roughly $116,000,000 New York State Supreme
Court judgment by levying on the Lady May. The Lady May subsequently sailed to
the Bahamas – even though the New York Supreme Court had issued a restraining
order requiring the ship to stay within its jurisdiction. PAX accordingly moved
for contempt, and the state court held a hearing at which Guo insisted that the Lady
May belonged to her, making it unfair to penalize Kwok for the yacht’s
movements.
The state court disagreed. It explained that “Guo’s testimony was . . .
internally inconsistent and dissembling,” and that the evidence showed that Kwok
“control[led] the yacht, . . . provided the funds to purchase it[,] and . . . principally
enjoy[ed its] use.” J. App’x at 553–54. It therefore held Kwok in contempt,
emphasizing that he had attempted to “avoid and deceive his creditors by parking
his substantial personal assets with a series of corporations, trusted confidants,
and family members,” and that “[t]he machinations associated with th[is] shell
5 game” were “of a piece with every other evasive and contemptuous act” he had
taken throughout the litigation. J. App’x at 546, 552.
Roughly a week later, in February 2022, Kwok filed for bankruptcy. In his
bankruptcy forms, he claimed to own a handful of electronic appliances, a cell
phone, clothing, a few thousand dollars in tax-refund and COVID-relief checks,
and a Pomeranian – but not the Lady May. PAX responded by asking the
bankruptcy court to permit the New York contempt proceedings to go forward,
despite the automatic stay that the Chapter Eleven petition had triggered. While
that motion was pending, Kwok proposed a draft plan to settle the bankruptcy
proceedings, under which “HK USA [would] transfer” the Lady May to his
creditors. J. App’x at 138. And at around the same time, HK also entered the
bankruptcy fray, initiating an adversary proceeding in which it claimed that it was
the true owner of the Lady May.
Meanwhile, the U.S. Trustee asked the bankruptcy court to appoint a
Chapter Eleven trustee to oversee the bankruptcy estate. The Trustee explained
that it had “concerns about the odd combination of what appears to be artificial
self-created poverty by the Debtor to insulate himself from creditors and the
Debtor's filing of this case to obtain protection from creditors owed millions.” In
6 re Kwok, 640 B.R. 514, 517 (Bankr. D. Conn. 2022) (internal quotation marks
omitted).
Before the bankruptcy court ruled on the U.S. Trustee’s motion, the parties
settled PAX’s motion to exempt the New York proceedings from the automatic
stay; PAX agreed to drop its request to lift the stay, and HK promised to bring the
Lady May back to “the navigable waters of Connecticut” – within the jurisdiction
of the bankruptcy court – and to place $37,000,000 in escrow as a guarantee. J.
App’x at 166. HK obtained this money from a British-Virgin-Islands-based entity
called Himalaya International Financial Group (“Himalaya”), which, as later
litigation revealed, Kwok controlled. The bankruptcy court entered the proposed
stipulation, and, a few months later, it separately granted the U.S. Trustee’s motion
to appoint a Chapter Eleven trustee.
When the dust from this flurry of motions cleared, a new Chapter Eleven
Trustee (the Appellee here) was presiding over the bankruptcy estate, and HK had
three assets: the Lady May, the Lady May II, and $37,000,000 in escrow. The Trustee
accordingly filed counterclaims against HK in its adversary proceeding, asserting
that (i) the New York court’s findings in the contempt proceeding estopped HK
from arguing that it (and not Kwok) owned the Lady May; and (ii) in any event,
7 HK was Kwok’s alter ego, meaning that all three of its assets belonged to the
bankruptcy estate. The Trustee also brought counterclaims for fraudulent transfer
and equitable ownership relating to the assets.
The bankruptcy court granted summary judgment to the Trustee on his
collateral-estoppel and alter-ego counterclaims. HK and Guo then appealed to the
district court, which exercised its discretionary jurisdiction over interlocutory
bankruptcy appeals, see Sp. App’x at 81–83 (citing 28 U.S.C. § 158(a)), and affirmed
both orders, explaining that there was “no genuine issue of material fact that HK
. . . [was Kwok’s] alter ego,” that HK was separately estopped from relitigating
“the issue of the ownership of the Lady May” because there was no “genuine issue
of material fact that Appellants [had] a full and fair opportunity to litigate th[at]
issue” in the state-court proceeding, and that this “collateral[-]estoppel finding
[was] not necessary to the alter[-]ego determination,” id. at 86, 90. Appellants
timely appealed.
II. DISCUSSION
Because “the district courts [in bankruptcy cases] have jurisdiction to hear
appeals from interlocutory orders in instances where the courts of appeals do not,”
we must first “determine the jurisdictional basis of [the] matter before us.” In re
8 Chateaugay Corp., 922 F.2d 86, 89 (2d Cir. 1990). We hold that we have jurisdiction
here, and that the district court correctly granted summary judgment on the
Trustee’s alter-ego claim – thus mooting his collateral-estoppel claim.
A. Jurisdiction
“In every appeal . . . ‘the first and fundamental question is that of
jurisdiction.’” Marquez v. Silver, 96 F.4th 579, 582 (2d Cir. 2024) (quoting Steel Co.
v. Citizens for a Better Env't, 523 U.S. 83, 94 (1998)). We are “bound to ask and
answer” this question for ourselves, “even when [it is] not otherwise suggested.”
Id. (quoting Steel Co., 523 U.S. at 94).
As a general matter, 28 U.S.C. § 158(d) vests us with “‘jurisdiction of appeals
from all final decisions, judgments, orders, and decrees’ of district courts
reviewing decisions of bankruptcy courts.” In re Delaney, 110 F.4th 565, 567
(2d Cir. 2024) (quoting 28 U.S.C. § 158(d)(1)). When this appeal was filed, the
district court decision was not final because the Trustee’s remaining counterclaims
were still technically pending in the bankruptcy court. See Chateaugay Corp., 922
F.2d at 90 (“An order granting partial summary judgment is interlocutory.”). But
“when fewer than all of a plaintiff’s claims have been dismissed, the plaintiff may
secure immediate appellate review of the dismissals by definitively agreeing to
9 forgo pursuit of the claims that remain pending.” Zivkovic v. Laura Christy LLC,
137 F.4th 73, 82 (2d Cir. 2025) (discussing 28 U.S.C. § 1291); see also In re AroChem
Corp., 176 F.3d 610, 618 (2d Cir. 1999)) (explaining that section 1291’s “general
grant of appellate jurisdiction” is “similar” to section 158(d)). At oral argument,
the Trustee agreed to dismiss his remaining claims with prejudice. We accordingly
have jurisdiction. See 16 Casa Duse, LLC v. Merkin, 791 F.3d 247, 255 (2d Cir. 2015)
(concluding that jurisdiction existed because party “agreed to a dismissal of his
remaining claim . . . with prejudice” at oral argument).
B. Merits
On the merits, Appellants argue that the district court improperly affirmed
the bankruptcy court’s order ruling that HK was Kwok’s alter ego and reverse-
piercing HK’s corporate veil. In particular, Appellants contend that (i) the Trustee
lacked standing under the Bankruptcy Code to bring his reverse veil-piercing
claim; and (ii) genuine disputes as to issues of material fact precluded summary
judgment.
“When a bankruptcy appeal reaches us after district court review of the
bankruptcy court order, our review of the bankruptcy court order is plenary,” and
we “independently . . . evaluat[e] [its] legal conclusions de novo and its factual
10 findings for clear error.” In re N. New England Tel. Operations LLC, 795 F.3d 343,
346 (2d Cir. 2015) (internal quotation marks omitted). We accordingly “review a
grant of summary judgment de novo, taking all factual inferences in favor of the
non-moving party.” In re Blackwood Assocs., L.P., 153 F.3d 61, 67 (2d Cir. 1998). We
address each of Appellants’ arguments in turn. 2
1. The Trustee has Standing to Bring the Veil-Piercing Claim.
“Under the Bankruptcy Code, the bankruptcy trustee may bring claims
founded [both] on the rights of the debtor and on certain rights of the debtor’s
creditors.” Hirsch v. Arthur Andersen & Co., 72 F.3d 1085, 1093 (2d Cir. 1995)
(internal quotation marks omitted). To assert the debtor’s rights, trustees
generally must invoke section 541 of the Code – which sweeps “all legal or
equitable interests of the debtor in property as of the commencement of the
[bankruptcy] case” into the estate administered by the trustee. In re Nordlicht, 115
F.4th 90, 104 (2d Cir. 2024) (quoting 11 U.S.C. § 541(a)(1)). Trustees may also
pursue the “rights of the debtor’s creditors” by turning to other sections of the
2 As the district court correctly noted, the Trustee’s collateral-estoppel counterclaim “[will] be rendered moot if the order granting summary judgment on the [alter-ego] counterclaim is affirmed,” because piercing HK’s corporate veil would win the Trustee all of HK’s assets – including the yacht at issue in the collateral-estoppel order. Sp. App’x at 81 n.2.
11 Code, including section 544. St. Paul Fire & Marine Ins. Co. v. PepsiCo, Inc., 884 F.2d
688, 700 (2d Cir. 1989) (citing 11 U.S.C. § 544). 3
“Section 544(a) of the Code, the ‘strong-arm’ clause, enables the trustee in
bankruptcy to act as a hypothetical lien creditor as of the day the bankruptcy case
is filed.” In re Kors, Inc., 819 F.2d 19, 22 (2d Cir. 1987). That section expressly vests
the trustee with the “rights and powers” of “a creditor that extend[ed] credit to the
debtor at the time of the commencement of the case, and that obtain[ed], at such
time and with respect to such credit, a judicial lien on all property on which a
creditor on a simple contract could have obtained such a judicial lien, whether or
not such a creditor exists.” 11 U.S.C. § 544(a). In other words, section 544(a)
permits the trustee to assert any generalized claims that would belong to a
hypothetical high-priority lien creditor.
To evaluate such claims, we must determine whether “state law would
allow . . . a supposed or hypothetical creditor of the debtor” to bring them. In re
Vienna Park Props., 976 F.2d 106, 115 (2d Cir. 1992) (internal quotation marks
3 Here, the Trustee pursues claims under both sections 541 and 544. The parties spend much energy debating questions related to the Trustee’s standing under section 541 – including whether a debtor may assert so-called insider reverse veil-piercing claims, and whether creditors’ claims may also belong derivatively to the bankruptcy estate. But we need not reach the issue of the Trustee’s standing under section 541 because we conclude that the Trustee may assert the claims at issue here under section 544.
12 omitted). Here, that state is Delaware, since HK is incorporated there and “[t]he
law of the state of incorporation determines when the corporate form will be
disregarded and liability will be imposed on shareholders.” Kalb, Voorhis & Co. v.
Am. Fin. Corp., 8 F.3d 130, 132 (2d Cir. 1993). Delaware law recognizes outsider
reverse veil-piercing claims, which are “implicated where an outside third party,
frequently a creditor, urges a court to render a company liable on a judgment
against” an insider. Manichaean Cap., LLC v. Exela Techs., Inc., 251 A.3d 694, 710
(Del. Ch. 2021) (internal quotation marks omitted). 4 That is exactly the kind of
claim that the Trustee brings here: by stepping into the third-party creditors’ shoes
under section 544, the Trustee invokes those creditors’ rights to make HK pay for
Kwok’s debts.
Appellants challenge the Trustee’s ability to bring these claims on two
principal grounds. First, they contend that Delaware law applies reverse veil-
piercing “only to owners of a business organization.” Appellants’ Br. at 41
(internal quotation marks omitted). Appellants insist that because Kwok does not
4By contrast, Delaware law has neither “endors[ed] [n]or reject[ed]” insider reverse veil-piercing, which allows a “controlling member” to “disregard the corporate entity that otherwise separates the member from the corporation.” Manichaean, 251 A.3d at 714 n.118, 710 (alterations and internal quotation marks omitted). Because the Trustee relies on the rights of (outsider) creditors under section 544, we need not consider whether the Trustee may also assert insider claims on behalf of Kwok himself.
13 technically own HK, the Trustee cannot access HK’s assets through Kwok. To
support this argument, Appellants rely on a stray line from Manichaean, where the
Court of Chancery explained that “reverse veil-piercing involves the imposition of
liability on a business organization for the liabilities of its owners.” 251 A.3d at 710
(emphasis added). But that line merely used a textbook example to summarize
reverse veil-piercing “[a]t its most basic level,” without purporting to strictly limit
the scope of that doctrine. Id. And far from adopting a formalistic rule, the court
subsequently stressed that “reverse veil-piercing, like traditional veil-piercing, is
rooted in equity, and the court must consider all relevant factors . . . to reach an
equitable result.” Id. at 715. Manichaean thus does not support the rigid theory of
reverse veil-piercing on which Appellants depend.
Second, Appellants argue that our decision in Shearson Lehman Hutton, Inc. v.
Wagoner requires us to read section 544 more narrowly. 944 F.2d 114 (2d Cir. 1991).
There, we explained that “a bankruptcy trustee has no standing generally to sue
third parties on behalf of the estate’s creditors, but may only assert claims held by
the bankrupt corporation itself.” Id. at 118. Ignoring the plain text of section 544,
Appellants contend that we should interpret that section as “serv[ing] certain
limited purposes” – including “allow[ing] . . . the trustee . . . to cut off any secret
14 or unperfected liens on debtor property,” Appellants’ Br. at 32–33 (internal
quotation marks omitted) – because any other reading would conflict with
Wagoner.
But section 544 can coexist with Wagoner because that statute does not allow
trustees to assert just any creditor claim. 5 Instead, courts must distinguish between
“general” and “personal” claims. Nordlicht, 115 F.4th at 105 (discussing section
541). “If a claim is a general one, with no particularized injury arising from it, and
if that claim could be brought by any creditor of the debtor, the trustee is the
proper person to assert the claim.” St. Paul Fire, 884 F.2d at 701. This approach
promotes the “equitable distribution [of assets] among creditors” by “allow[ing]
the trustee to exercise the ‘strong arm’ power and recover corporate assets for the
benefit of all creditors of the corporation,” thus preventing a race for assets in
which the savviest creditors would reap the greatest rewards. Nordlicht, 115 F.4th
at 05 (quoting Cumberland Oil Corp. v. Thropp, 791 F.2d 1037, 1042 (2d Cir. 1986)).
By contrast, creditors – not the trustee – “are exclusively entitled to pursue
5Wagoner also did not involve or attempt to interpret section 544: the trustee had “insist[ed]” that “he [was] not asserting the claims of the [creditors],” and we accordingly found it “unnecessary for us to delve deeply into when, if ever, a trustee may sue a third party on behalf of the bankrupt’s creditors.” 944 F.2d at 118.
15 personal claims,” which belong only to specific sets of creditors harmed in
particular ways. Id. (internal quotation marks omitted and alteration adopted). 6
Put simply, the Wagoner rule bars trustees from asserting personal-creditor claims,
while section 544 allows them to pursue general causes of action that would
benefit any hypothetical creditor.
Appellants argue that St. Paul Fire does not control this case because there
we merely concluded that “an alter ego claim may be asserted by [a] debtor
corporation” under Ohio law. Appellants’ Br. at 36 (quoting St. Paul Fire, 884 F.2d
at 695). As such, the claim at issue in St. Paul Fire was “property of the estate”
itself under section 541 – not a separate claim that “rel[ied] upon the ability of the
trustee [to] stand[] in the shoes of the creditors” under section 544. Id. at 37.
But St. Paul Fire’s reasoning stretches further than that. There, we explained
that the trustee could properly bring the cause of action at issue either if that claim
was “property of the debtor,” or if it was “otherwise properly asserted by the
bankruptcy trustee.” St. Paul Fire, 884 F.2d at 702. And we expressly endorsed
6 Wagoner, like the other cases that Appellant cites, involved particularized claims – not general ones. See 944 F.2d at 119–20; see also Picard v. JPMorgan Chase & Co., 460 B.R. 84, 96 (S.D.N.Y. 2011) (“[T]he Trustee’s claims are not being brought on behalf of all [the debtor’s] creditors, and could not be brought by any given one of them.”); Caplin v. Marine Midland Grace Tr. Co. of N.Y., 406 U.S. 416, 416 (1972) (claims asserted “on behalf of persons holding [specific] debentures”).
16 Koch Refining v. Farmers Union Central Exchange, Inc., where the Seventh Circuit
held that the trustee “has creditor status under section 544 to bring suits for the
benefit of the estate and ultimately of the creditors,” and that “[alter ego]
allegations that could be asserted by any creditor could be brought by the trustee
as a representative of all creditors.” 831 F.2d 1339, 1348–49 (7th Cir. 1987)
(emphases added); see St. Paul Fire, 884 F.2d at 704. Finally, we cited section 544
itself when discussing the trustee’s power to invoke “certain rights of the debtor’s
creditors.” Id. at 700. St. Paul Fire thus shows that trustees may assert generalized
alter-ego claims either under section 544 or – if those claims also belong to the estate
itself – under section 541.
That leaves us with one final task: to determine whether the claims at issue
here are general or personal. The answer is clear – “reverse veil-piercing claim[s]
[are] . . . general.” Nordlicht, 115 F.4th at 108–09 (analyzing New York reverse veil-
piercing doctrine similar to Delaware law). Such claims “increas[e] the basket of
assets that could be used to satisfy any and all liabilities owed by the debtor.” Id.
at 108 (alterations adopted and internal quotation marks omitted). As such, they
are general claims that enlarge the size of the bankruptcy estate for all creditors –
not particular claims that only certain subsets of creditors could assert. Because a
17 hypothetical creditor could bring these generalized claims against HK, the Trustee
may also do so under section 544(a). See id. at 100 & n.4 (trustee settled reverse
veil-piercing claims by “exercising [section 544] power” to “amass[] . . . estate
assets for a pro rata distribution to all creditors” (quoting Koch, 831 F.2d at 1352)).
2. HK is Kwok’s Alter Ego.
A bankruptcy court may grant a motion for summary judgment if “there is
no genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law.” Fed. R. Civ. P. 56; Fed. R. Bankr. P. 7056. While the movant
must “demonstrate the absence of a genuine issue of material fact,” it need not
“support its motion with affidavits or other similar materials negating the
opponent’s claim.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). And if a
movant carries its burden, the opponent “must do more than simply show that
there is some metaphysical doubt as to the material facts,” and instead “come
forward with specific facts showing that there is a genuine issue for trial.”
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586–87 (1986) (quoting
Fed. R. Civ. P. 56(e)).
When reviewing reverse-veil piercing claims, Delaware courts begin by
weighing “the traditional factors” for “traditional veil-piercing claim[s],” which
“include insolvency, undercapitalization, commingling of corporate and personal
18 funds, the absence of corporate formalities, and whether the subsidiary is simply
a facade for the owner.” Manichaean, 251 A.3d at 714. “The court should then ask
whether the owner is utilizing the corporate form to perpetuate fraud or an
injustice” by considering the following eight factors:
(1) [whether] allowing a reverse pierce would impair the legitimate expectations [of innocent shareholders;] (2) the degree to which the corporate entity whose disregard is sought has exercised dominion and control over the insider who is subject to the claim[;] (3) the degree to which the injury . . . is related to the corporate entity’s dominion and control of the insider, or to that person’s reasonable reliance upon a lack of separate entity status between the insider and the corporate entity[;] (4) the public convenience[;] (5) the extent and severity of the wrongful conduct[;] (6) the possibility that the person seeking the reverse pierce is himself guilty of wrongful conduct[;] (7) the extent to which the reverse pierce will harm innocent third-party creditors[;] and (8) the extent to which other claims or remedies are practically available to the creditor.
Id. at 714–15 (internal quotation marks omitted). Applying those factors here, we
agree that HK is Kwok’s alter ego.
Several undisputed facts lead us to that conclusion. For starters, the
traditional veil-piercing factors suggest that HK was a shell company. As the
bankruptcy court recognized, HK had no revenue; it hired no directors, officers,
or employees; it neither filed tax returns nor maintained a bank account; it kept no
19 records other than those related to the Lady May; and it pursued no business (other
than owning the Lady May and the Lady May II). Meanwhile, Kwok himself – not
Guo – primarily sailed on the Lady May; HK’s office also housed Kwok’s lawyers
and other entities connected to Kwok; Kwok used HK’s address when he filled out
his own bankruptcy petition; and Kwok initially proposed a reorganization plan
that would have liquidated the Lady May. HK thus was insolvent and
undercapitalized, it failed to observe corporate formalities, and it served as “a
façade” for Kwok. Id. at 714.
Kwok also used HK’s corporate form to “perpetuate fraud [and] injustice.”
Id. at 715. Borrowing from the fraudulent-transfer context, the bankruptcy court
pointed to several traditional badges of fraud that raised red flags here. These
include whether a business organization is suspiciously “closely[ ]held,” whether
there is a “family . . . relationship between the parties,” and whether the transferor
continues to “possess[], benefit [from,] or use . . . the property in question.” In re
Kaiser, 722 F.2d 1574, 1582 (2d Cir. 1983) (internal quotation marks omitted).
Here, HK is closely held, Guo is Kwok’s daughter, and Kwok enjoyed the
benefits of the Lady May when he cruised the high seas on it. Furthermore, the
Manichean factors point in the same direction: Guo has no “legitimate
20 expectations” in any of HK’s assets because it is a façade for Kwok; Kwok
exercised dominion and control over HK; the public convenience favors
preventing the injustice of shielding HK’s assets; the reverse veil-pierce will help
Kwok’s creditors recover the funds owed to them; and HK’s creditor, Himalaya,
which Kwok also appears to have controlled, should have known that it risked
losing its assets by lending them to what was at least arguably a shell company in
the midst of its controller’s bankruptcy.
Appellants resist this logic by urging us to interpret the facts as narrowly as
possible. They contend, among other things, that nothing in Delaware law
affirmatively requires HK to have directors, officers, employees, or a bank account;
that the record definitively shows only that Kwok used the Lady May for “three
months in the summer of 2020,” Appellants’ Br. at 48; and that Guo offered her
father a multimillion-dollar yacht to assist him in his bankruptcy proceedings and
obtain a release for herself.
But “[a] party opposing summary judgment does not show the existence of
a genuine issue of fact to be tried merely by making assertions that are conclusory
. . . or based on speculation.” Major League Baseball Props., Inc. v. Salvino, Inc.,
542 F.3d 290, 310 (2d Cir. 2008). Here, the Trustee presented a mountain of
21 evidence suggesting that HK was Kwok’s alter ego. Appellants cannot brush that
mountain aside merely by presenting their own far-fetched and unsupported
explanations of the facts; they instead must provide evidence that supports a
contrary conclusion. 7 See Matsushita, 475 U.S. at 586–87.
III. CONCLUSION
For the foregoing reasons, we AFFIRM the judgment of the district
court granting the Trustee’s motion for summary judgment.
7Guo and HK also argue that the bankruptcy court’s alter ego finding depended on its earlier collateral-estoppel finding. But as the district court correctly noted, “undisputed facts in the record” independently supported the bankruptcy court’s alter ego analysis. Sp. App’x at 84.