Rabex of Colorado, Inc. v. Reed (In Re Rabex of Colorado, Inc.)

MEMORANDUM DECISION ON APPEAL

KANE, Senior District Judge.

The sole issue in these appeals is the priority to be given an alter ego claim in bankruptcy. The Appellants uniformly dispute the bankruptcy court’s treatment of the general rule that subordination be premised on the inequitable conduct of the creditor as an absolute rule barring subordination in the absence of such conduct. Appellants maintain the rule is not absolute and that it must yield, in the appropriate case, to the equally valid rule that equitable remedies should be subject to the intervening rights of innocent third parties.…