In Re: Icenhower

Even after a notice of appeal has been filed, a bankruptcy court typically does not have the ability to alter or expand a judgment, although, the bankruptcy court retains jurisdiction to oversee any ordered course of conduct by parties to an action.

In December of 2003 the Incenhower’s filed for bankruptcy protection, prior to this, the Icenhower’s had sold a Mexican villa the family owned to H&G, a shell company Mr. Icenhower effectively controlled. In June of 2004, H&G sold the villa to the Diaz’s for $1.5 million, at where closing of the sale was controlled by Mr. Icenhower. In August 2004, the bankruptcy trustee first filed an action to void the sale of the villa to H&G, claiming that the sale was fraudulent pre-petition transfer, and then in August 2006 filed action to avoid the sale from H&G to the Diaz’s. The bankruptcy court found that H&G was the alter ego of the Icenhower’s and consolidated H&G with the rest of their bankruptcy estate, which made the transfer of the villa to the Diaz’s an unauthorized post-petition transfer to which the Diaz’s had no available defense given their prior knowledge of the Icenhower’s bankruptcy before closing. After the district court affirmed the decision of the bankruptcy court, both Icenhower’s, the Diaz’s, and the bankruptcy trustee filed this appeal. The Ninth Circuit held that, even after a notice of appeal has been filed, a bankruptcy court typically does not have the ability to alter or expand a judgment, although, the bankruptcy court retains jurisdiction to oversee any ordered course of conduct by parties to an action. As such, the bankruptcy court in this instance had the authority to oversee the transfer of the Mexican villa which it had ordered in order to undo the fraudulent conveyance. AFFIRMED.