In the Matter of 8Speed8, Inc.
SIG Capital, LLC, Appellee. Vibe Micro, Inc., Appellant,
and Submitted November 15, 2018 San Francisco, California
from the United States District Court for the District of
Nevada Richard F. Boulware II, District Judge, Presiding D.C.
Torrence E.S. Lewis (argued), Law Offices of Torrence E.S.
Lewis, Pittsburgh, Pennsylvania, for Appellant.
A. Stephens (argued), Stephens Gourley & Bywater, Las
Vegas, Nevada, for Appellee.
Before: Susan P. Graber, Stephanie Dawn Thacker, [*] and Mark J.
Bennett, Circuit Judges.
panel affirmed the district court's decision affirming
the bankruptcy court's denial of a request for statutory
damages made by a 50% shareholder in an involuntary debtor
following dismissal of the bankruptcy case.
panel held that the shareholder lacked standing to seek
damages under 11 U.S.C. § 303(i) because it was not the
Judge Bennett wrote that Miles v. Okun (In re
Miles), 430 F.3d 1083 (9th Cir. 2005), holding that a
third party could not seek damages under § 303(i), was
not dispositive, and the shareholder did not lack standing to
seek damages and attorneys' fees that would be awarded to
the debtor, regardless of the debtor's ability to defend
itself in the bankruptcy action, and notwithstanding that the
shareholder actually obtained a dismissal on behalf of the
THACKER, CIRCUIT JUDGE
case asks whether a 50% shareholder of an involuntary debtor
may seek damages under 11 U.S.C. § 303(i). We hold that
it may not. Accordingly, we affirm the decision of the
March 2012, 8Speed8, Inc. was incorporated in the state of
Nevada. Appellant Vibe Micro, Inc. is a 50% owner of
8Speed8's voting stock. Appellee SIG Capital, Inc. is a
creditor of 8Speed8 and owns 20 million contingent shares.
December 13, 2013, SIG filed the involuntary bankruptcy
petition at the center of this dispute. 8Speed8 never
appeared in the bankruptcy action. Instead, on January 10,
2014, Vibe Micro filed a motion to dismiss the bankruptcy.
Vibe Micro also asked for costs, fees, and actual and
punitive damages under § 303(i). The bankruptcy court
held a hearing August 28, 2014. At the hearing, SIG conceded
that dismissal was appropriate. The bankruptcy court agreed
but denied Vibe Micro's request for statutory
attorney's fees and damages.
court concluded that Vibe Micro did not have standing under
§ 301(i). The district court affirmed that decision, and
this appeal followed.
review the bankruptcy court's interpretation of
bankruptcy statutes de novo. See Sofris v.
Maple-Whitworth, Inc. (In re Maple-Whitworth, Inc.), 556
F.3d 742, 745 (9th Cir. 2009). No deference is given to the
district court's review of that decision. See ...