In Re Sharif
447 B.R. 853
Bankr. N.D. Ill.2011Background
- Ragda Sharifeh seeks to intervene under FRBP 2018 as to the July 6, 2010 alter ego finding and the August 5, 2010 turnover order concerning the Soad Wattar Trust.
- Richard Sharif, the Debtor, previously faced an adversary proceeding in Texas and a parallel sanctions posture for discovery noncompliance that culminated in court orders against him.
- The WIN Plaintiffs asserted in Adversary Proceeding 09-00770 that Sharif violated multiple 727 grounds, including concealment of assets and failure to disclose trust assets.
- The Debtor and his counsel failed to sign or verify certain interrogatory responses, violating Fed. R. Civ. P. 33 and leading to sanctions concerns.
- The WIN Plaintiffs discovered numerous unproduced documents relating to the Soad Wattar Trust, other trust assets, bank statements, and conveyance/disposition of assets, which Sharif had not produced.
- The court concluded Ragda Sharifeh is not an appropriate intervener; she lacks timely intervention and standing as successor beneficiary/trustee, and the amendment order would unduly delay the proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness of intervention | Sharifeh timely sought intervention as a matter affecting the trust. | Intervention was untimely and should have been sought earlier. | Denied due to undue delay prejudicing existing parties |
| Standing to intervene as successor beneficiary/trustee | Sharifeh is a successor beneficiary/trustee with protectable interest. | Beneficiaries cannot sue the trust; trustee alone may pursue claims; no clear status shown. | Denied; no evidence she is successor trustee and trust representation required |
| Effect of July 6, 2010 and August 5, 2010 orders on intervention | Intervention needed to contest orders affecting trust assets. | Orders adjudicated; intervention now would unduly delay adjudication. | Denied; intervention not warranted under Rule 24(b) |
Key Cases Cited
- In re Schneider, 417 B.R. 907 (Bankr.N.D.Ill.2009) (trustee authorized to represent trust interests; limits beneficiaries' standing)
- Hindmon v. Nat'l.-Ben Franklin Life Ins. Co., 677 F.2d 617 (7th Cir.1982) (interrogatory answers must be verified by the party, not merely counsel)
- In re Wilson, 965 F.2d 160 (7th Cir.1992) (section 1109(b) not applicable to chapter 7; ensures timely intervention principles)