In re Zenga, 562 B.R. 341

Creditor Ivan Qi obtained a $2.5M state-court judgment against Vincent and Robin Zenga and filed separate involuntary Chapter 7 petitions against each spouse as a single petitioning creditor.
The Zengas moved to dismiss, arguing § 303(b)(1) requires three petitioning creditors when the debtor has 12 or more creditors.
Qi relied on the Zengas’ prior post-judgment sworn interrogatory answers listing only ten other creditors and argued the Zengas were estopped from claiming they had 12+ creditors.
The bankruptcy court accepted Qi’s estoppel argument, denied dismissal, and entered orders for relief; the Zengas appealed.
The BAP considered whether the creditor-numerosity rule in § 303(b)(1) is jurisdictional, whether Law v. Siegel bars equitable estoppel here, and whether judicial or equitable estoppel was properly applied.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Is the § 303(b)(1) creditor-numerosity requirement jurisdictional?	Qi: estoppel can be applied; threshold not jurisdictional.	Zenga: threshold is jurisdictional and cannot be overridden by equity.	Threshold is not jurisdictional; courts treat it as nonjurisdictional.
May Law v. Siegel bar equitable doctrines that alter a statutory numerosity threshold?	Qi: Law v. Siegel does not forbid equitable estoppel here.	Zenga: Siegel precludes using equity to override statutory requirements.	Siegel does not control where the statutory limit is nonjurisdictional; equitable doctrines remain available.
Was judicial estoppel applicable to bar the Zengas from proving 12+ creditors?	Qi: prior sworn interrogatory answers justify judicial estoppel.	Zenga: judicial estoppel inapplicable because no prior court adopted the prior position.	Judicial estoppel conceded inapplicable; elements not met.
Was equitable estoppel properly applied to preclude evidence of 12+ creditors?	Qi: misrepresentation + reasonable reliance justify estoppel.	Zenga: no actual substantial detriment to Qi; estoppel improper.	Equitable estoppel was erroneously applied — no finding of actual and substantial detriment to Qi; orders for relief vacated and case remanded.

Arbaugh v. Y & H Corp., 546 U.S. 500 (2006) (statutory numerosity limits are not jurisdictional absent clear congressional intent)
Law v. Siegel, 571 U.S. 415 (2014) (bankruptcy courts cannot use § 105(a) to override explicit Code provisions)
Adams v. Zarnel (In re Zarnel), 619 F.3d 156 (2d Cir.) (post-Arbaugh holding that § 303(b)(1) numerosity requirement is nonjurisdictional)
Thomas v. Miller, 489 F.3d 293 (6th Cir.) (equitable estoppel can bar reliance on a statute’s numerical threshold in appropriate cases)
Trusted Net Media Holdings, LLC v. The Morrison Agency, Inc. (In re Trusted Net Media Holdings, LLC), 550 F.3d 1035 (11th Cir.) (treating § 303 numerosity as nonjurisdictional)