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Kwok v. Despins - Alter Ego Finding Affirmed, Yacht Included in Bankruptcy Estate

The Second Circuit affirmed the District of Connecticut's judgment holding that HK International Funds Investments (USA) Limited, LLC was the alter ego of debtor Ho Wan Kwok, meaning its assets—including the approximately $37 million Lady May yacht—belonged to the bankruptcy estate. The court held that the Chapter 11 trustee has standing to assert alter ego claims on behalf of creditors. The appellants, Mei Guo and HK, challenged both standing and the alter ego finding, but the Second Circuit rejected both arguments, emphasizing evidence of asset concealment through shell entities.

Kwok Alter-Ego Claim Affirmed — HK Assets Belong to Bankruptcy Estate

The Second Circuit affirmed that a Chapter 11 trustee has standing to assert alter-ego claims on behalf of bankruptcy estate creditors. In affirming the lower courts, the court held that HK International Funds Investments (USA) Limited, LLC—a shell company controlled by debtor Ho Wan Kwok with no revenue, employees, or business purpose beyond owning a mega-yacht—was the debtor's alter ego, making the Lady May yacht (worth tens of millions of dollars) part of the bankruptcy estate. The court found the record compelled only one conclusion: HK was the debtor's alter ego.

Mei Guo v. Despins - Chapter 11 Alter Ego Standing and Asset Determination

The Second Circuit affirmed that a Chapter 11 trustee has standing to assert alter-ego claims on behalf of the bankruptcy estate's creditors. The court upheld the lower courts' conclusion that HK International Funds Investments (USA) Limited was the debtor's alter ego, meaning HK's assets belong to the bankruptcy estate. The case involved a mega-yacht and other assets allegedly owned by the self-described multi-billionaire debtor Ho Wan Kwok.