Lim v. Miller Parking Co., 560 B.R. 688

Background

Miller Parking Company LLC ("Miller Detroit") provided management services to family-owned parking properties; Miller Parking Company ("Miller Chicago") was an Illinois corporation that owned parking real estate (notably the Bismark Deck).\
Bruce Miller (patriarch) gifted his Miller Chicago shares to his children/grandchildren; James Miller (son) was president of both enterprises and managed intercompany activity.\
From 2000–2009 Miller Chicago paid substantial sums to Miller Detroit (characterized as loans, management fees, or wages) that principally funded Bruce Miller’s draws.\
Alan Ackerman and CH Holding sued Miller Detroit and Bruce Miller; after a 2009 judgment (~$3 million) Miller Detroit filed bankruptcy (Oct. 2009). Miller Chicago sold the Bismark Deck for net proceeds ≈ $9.76 million in Feb. 2009 and distributed roughly $9 million to shareholders in Sept. 2009, then dissolved.\
Trustee K. Jin Lim (for Miller Detroit/MP Liquidating) sued James Miller, Miller Chicago, family members and related trusts alleging preferential and fraudulent transfers, alter ego, substantive consolidation, disgorgement of Chicago distributions, breach of fiduciary duty, breach of contract, and an accounting.\
Bench trial addressed Count IV (disgorgement), Count V (substantive consolidation), Count VI (alter ego), and Count IX (accounting); the trustee abandoned the accounting claim at trial.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Alter ego / veil piercing (whether Miller Chicago is Miller Detroit’s alter ego)	Miller Chicago was used as a mere instrumentality to shield assets from Miller Detroit’s creditors; transfers and shared management show unity and wrongful use.	Entities kept separate books, separate bank accounts, observed corporate formalities, and transfers chiefly flowed from Chicago to Detroit to support Bruce Miller — not a scheme to defraud Detroit creditors.	Dismissed: plaintiff failed to prove instrumentality, fraud/wrong distinct from mere creditor inconvenience, or unjust loss caused by Chicago; Michigan law applied.
Substantive consolidation of Miller Chicago and Miller Detroit	Creditor reliance and the parties’ intercompany dealings justify treating entities as one for creditor recovery.	No post‑petition scrambling; separateness observed; consolidation is an extreme remedy unsupported by record.	Dismissed: factors do not show disregard of separateness or creditor reliance sufficient to consolidate.
Disgorgement of distributions to Miller Chicago shareholders	As alter ego or via consolidation, Chicago’s distributions are voidable and must be disgorged to benefit Miller Detroit’s estate.	Because alter ego and consolidation claims fail, no basis to disgorge Chicago distributions.	Dismissed: no basis to clawback Chicago distributions absent successful veil‑piercing/consolidation.
Accounting (Count IX)	Trustee sought full accounting of intercompany transactions to trace transfers and consideration.	Defendants: accounting dependent on other reserved claims; contested scope.	Dismissed (abandoned at trial): trustee declined to present proofs; claim treated as abandoned.

Key Cases Cited

Sea-Land Servs., Inc. v. Pepper Source, 941 F.2d 519 (7th Cir. 1991) (veil piercing requires something beyond mere diminution of creditor recovery)\
Servo Kinetics, Inc. v. Tokyo Precision Instruments Co., 475 F.3d 783 (6th Cir. 2007) (parent’s use of subsidiary as instrumentality to commit a deliberate wrong supports piercing)\
In re RCS Eng’g Prods. Co., 102 F.3d 223 (6th Cir. 1996) (elements for alter ego/veil‑piercing under Michigan law)\
Green v. Ziegelman, 873 N.W.2d 794 (Mich. Ct. App. 2015) (discussing separate showings for "fraud or wrong" and unjust loss in alter ego analysis)\
In re Owens Corning, 419 F.3d 195 (3d Cir. 2005) (formulation for substantive consolidation standards used by courts)\
Glennon v. Dean Witter Reynolds, 83 F.3d 132 (6th Cir. 1996) (federal courts apply forum state choice‑of‑law rules for pendent state claims)