HK Int’l Funds Invs. (USA) v. Despins (In re Ho Wan Kwok)

Full title: In re: HO WAN KWOK, et al., Debtors. v. LUC A. DESPINS, CHAPTER 11 TRUSTEE…

Court: United States Bankruptcy Court, District of Connecticut

Date published: Mar 30, 2023

Facts

The Court issues this Supplemental Memorandum of Decision in support of its March 27, 2023, oral ruling granting the Motion for Partial Summary Judgment on First Counterclaim (ECF No. 146, the “Motion for Summary Judgment”) of Luc A. Despins, in his capacity as Chapter 11 trustee (the “Trustee”) for the estate (the “Estate”) of Mr. Ho Wan Kwok (the “Individual  Debtor”) and the subsequently entered Order Granting Motion for Partial Summary Judgment (ECF No. 172, the “Summary Judgment Order”). The Trustee, the Defendant in the above-captioned adversary proceeding, filed several counterclaims against Plaintiff HK International Funds Investments (USA) Ltd., LLC (“HK USA”) and Ms. Mei Guo, the Individual Debtor’s daughter and the sole member of HK USA (together with HK USA, the “HK Parties”). (ECF No. 36, in pertinent part, the “Counterclaims.”) Pursuant to 11 U.S.C. §§ 541 and 542, the Trustee’s first counterclaim (the “First Counterclaim”) seeks a declaratory judgment that the yacht named the Lady May is property of the Estate and an order requiring HK USA to deliver the Lady May to the Trustee.

Issue

Decision

For the reasons stated on the record and set forth above, the Court concludes that there is no genuine issue of material fact as to whether (a) the issue of Individual Debtor’s beneficial ownership and control of the Lady is decisive as to the First Counterclaim and the identical issue was necessarily decided by Justice Ostrager in the Final Contempt Decision, which found by clear and convincing evidence that the Individual Debtor beneficially owned and controlled the Lady May or (b) the HK Parties had a full and fair opportunity to litigate this issue in the New York Action. The Court was persuaded by the Trustee that an identity of issue existed and not persuaded by the HK Parties that they lacked a full and fair opportunity to litigate this issue. Therefore, the Court concludes that, as a matter of law, the HK Parties are collaterally estopped from contesting the Individual Debtor’s beneficial ownership and control of the Lady May. On this basis, the Court further concludes that, as a matter of law, the Trustee is entitled to summary judgment on the First Counterclaim, namely that pursuant to 11 U.S.C. § 541(a) the Lady May is property of the Estate, which, pursuant to 11 U.S.C. § 542(a), the HK Parties must deliver to the Trustee.


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