Hyundai Steel Demands Summary Judgment in Prime Metals Case
May 05, 2022, United States Bankruptcy Court Central District of California – Defendant Hyundai Steel Company (“Hyundai”) seeks summary judgment, or in the alternative partial adjudication in the adversary proceeding filed against it in the bankruptcy case of the estate of Prime Metals, U.S.A., Inc. (“Prime”).
Richard A. Marshack, the Chapter 7 Trustee of the bankruptcy estate of Prime, had made eleven counts of claims against Hyundai in his complaint in the adversary proceeding. The Court had granted Hyundai’s motion to dismiss, striking five of these eleven counts. Five of the remaining claims seek to avoid three alleged transfers of money or property by Prime to Hyundai, and the sixth count is an “alter ego” claim.
The Trustee argued that the three alleged transfers were part of a “scheme” through which Hyundai “controlled” all aspects of all decisions made by Prime and used that control to extract all value from Prime either directly, or indirectly through R-Techo, Co. Ltd. (“R-Techo”), a separate Korean entity.
Hyundai asserts that Trustee cannot establish that Hyundai was either a “statutory or a non-statutory insider” of Prime, and none of the alleged transfers occurred within ninety days of Prime’s bankruptcy filing. Hyundai argues that Trustee cannot prove that Hyundai received any funds “fraudulently” transferred from Prime to R-Techo. Hyundai also claims that Prime’s creditors were not harmed by any of the transactions that took place between Prime and Hyundai. Hyundai argues that Trustee’s “alter ego” claims also “fail” due to above-stated reasons.
Hyundai requests the Court to grant summary judgment on all remaining counts in this adversary proceeding, or, in the alternative, grant partial summary judgment as to the individual claims as to which Trustee “cannot meet his burden of proof”.
The case is Marshack v. Hyundai Steel Company (In re Prime Metals U.S.A., Inc.), AP No. 19-ap-01216-ES, United States Bankruptcy Court of Central District of California.