Tow v. Wellington Yu, 4:14-cv-03103

PGI (Peterson Group, Inc.), owned/controlled by defendant Yu, purchased property from Nikko Development in 2005; a side agreement and later payments created disputed economic interests.
PGI paid taxes, loan payments, and other expenses for the Property from 2005–2009 after Dr. Nikko failed to do so.
PGI sold the Property in 2009 to 7677 Apartments; later replacement financing (a $1,000,000 Note) and a second-lien deed of trust were executed in January 2010.
Parties settled related state-court litigation in December 2011: Note and deed of trust were endorsed/assigned and delivered to Dr. Nikko’s counsel that month; PGI filed Chapter 7 bankruptcy in March 2012.
Trustee sued Yu (former PGI insider) asserting turnover/avoidance claims under 11 U.S.C. §§ 542 and 549 and a state-law breach-of-fiduciary-duty claim; Yu moved for summary judgment.
Magistrate judge recommends granting summary judgment on turnover/avoidance (trustee failed to prove Note/Deed were estate property at petition) but denying summary judgment on breach-of-fiduciary-duty (genuine fact issue whether Yu breached duties to PGI/creditors while company was near insolvency).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether proceeds/Note and Deed of Trust were property of PGI's bankruptcy estate for turnover/avoidance under §§ 542 & 549	PGI retained an interest on the petition date; settlement/transfer ineffective and asset listed on PGI Schedule B supports estate ownership	Note and Deed were indorsed/assigned and delivered to Nikko in Dec. 2011 (pre-petition), so not estate property	Granted for Defendant: trustee failed to show transfer occurred post-petition; Note/Deed not estate property
Whether Yu breached fiduciary duties to PGI/creditors by negotiating settlement that gave him personal proceeds	Yu diverted value to himself via settlement instead of PGI; transaction harmed PGI/creditors	Settlement was in best interests of PGI and its creditors	Denied as to Yu: genuine fact issue exists whether Yu (sole shareholder/officer) breached duties while PGI was in vicinity of insolvency

Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard)
Anderson v. Liberty Lobby, 477 U.S. 242 (genuine dispute standard for summary judgment)
Brown v. City of Houston, Tex., 337 F.3d 539 (Fifth Circuit summary judgment discussion)
TIG Ins. Co. v. Sedgwick James of Wash., 276 F.3d 754 (evidentiary standards on summary judgment)
Celotex-related authority Meinecke v. H & R Block, 66 F.3d 77 (nonmovant’s burden to show genuine factual disputes)
Ramsey v. Henderson, 286 F.3d 264 (weight of speculative evidence on summary judgment)
Honore v. Douglas, 833 F.2d 565 (courts should not weigh evidence or assess credibility at summary judgment)
Gearhart Indus., Inc. v. Smith Int’l, Inc., 741 F.2d 707 (duties of corporate officers/directors under Texas law)
Weaver v. Kellogg, 216 B.R. 563 (S.D. Tex. 1997) (corporate insiders may owe fiduciary duties to creditors when company is near insolvency)
In re Heritage Org., LLC, 350 B.R. 733 (trustee’s burden to prove estate property)