Los Angeles Bankruptcy Attorney

Bankruptcy | Case Law | Substantive Consolidation

SUBSTANTIVE CONSOLIDATION

In re Bonham, 229 F.3d 750 (9th Cir. 2000)

Ninth Circuit adopts Second Circuit Augie/Restivo test:

1. whether creditors dealt with the entities as a single economic unit and did not rely

on their separate identity in extending credit; or

2. whether the affairs of the debtor are so entangled that consolidation will benefit

all creditors.

In re Augie/Restivo Baking Co., Ltd., 860 F.2d 515 (2d Cir. 1988)

Substantive consolidation improper where creditors dealt separately with debtors.