Church Joint Venture, L.P. v. Earl Blasingame, No. 18-6142 (6th Cir. 2020)
Annotate this CaseThe Blasingames filed for Chapter 7 bankruptcy. CJV purchased their debts to two banks, each arising from personal guarantees made to secure loans to businesses that failed. The Blasingames claimed that they owned no real property, owned personal property worth $5,700, and had a total monthly income of $888. The bankruptcy trustee and CJV successfully argued against the discharge of their debts. The bankruptcy court noted that the debtors had repeatedly concealed assets, including through the use of closely-held, interconnected corporations and trusts. CJV sued the Blasingames, their children, and those entities and trusts. CJV prevailed on two fraudulent transfer claims for transfers of money and of real property to trusts. CJV appealed the dismissal of claims based on reverse alter ego or reverse veil piercing; the denial CJV’s motion to certify to the Tennessee Supreme Court the question of whether Tennessee would recognize such theories; and the denial of CJV’s motion for leave to amend its complaint to add to its legal theories that the trusts were “self-settled.” The Sixth Circuit affirmed, finding “no persuasive data” to conclude that Tennessee’s high court would embrace the reverse piercing claims; reverse piercing is not a novel or unsettled area of law and certification was unnecessary. The failure of CJV to realize it could have made claims under a self-settled theory is not an adequate reason for a nearly five-year delay; the prejudice to defendants was apparent and substantial.
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