Friesen v. Seacoast Capital Partners II, L.P. (In re QuVis, Inc.)

MEMORANDUM AND ORDER

ERIC F. MELGREN, District Judge.

Plaintiffs appeal from the bankruptcy court’s decision to grant Defendant summary judgment on Plaintiffs’ adversary action requesting equitable subordination of Defendant’s secured interest in the debt- or’s assets. The Bankruptcy Code gives courts the discretion to equitably subordinate creditors’ claims if the creditor engaged in inequitable conduct that injured other creditors and if subordination is not inconsistent with other provisions of the Bankruptcy Code. Plaintiffs claim that Defendant — whose Managing Director sat on the debtor’s…