Donald Smith v. Sonya Slott

── Donald Smith v. Sonya Slott ── Court: Court of Appeals for the Eleventh Circuit Date: June 01, 2026 Category: NEW USCA11 Case: 24-13383 Document: 39-1 Date Filed: 06/01/2026 Page: 1 of 7 FOR PUBLICATION In the United States Court of Appeals For the Eleventh Circuit ____________________ No. 24-13383 ____________________ In re: NO RUST REBAR, INC., Debtor. ___________________________________ DONALD SMITH, GLOBAL ENERGY SCIENCES, LLC, RAW ENERGY MATERIALS CORP., RAW MATERIAL CORP., RAW, LLC, Plaintiffs-Appellants, YELLOW TURTLE DESIGN, LLC, Plaintiff, versus SONYA SALKIN SLOTT, GREEN TECH DEVELOPMENT, LLC, Defendants-Appellees. USCA11 Case: 24-13383 Document: 39-1 Date Filed: 06/01/2026 Page: 2 of 7 2 Opinion of the Court 24-13383 ____________________ Appeal from the United States District Court for the Southern District of Florida D.C. Docket No. 0:22-cv-61666-RKA ____________________ Before WILLIAM PRYOR, Chief Judge, and BRASHER and ABUDU, Cir- cuit Judges. WILLIAM PRYOR, Chief Judge: This appeal requires us to decide whether a bankruptcy court erred when it ordered the substantive consolidation of four entities it found were alter egos of the debtor entity. Donald Smith owns and operates the debtor entity, No Rust Rebar, and four other non-debtor entities. After finding that those entities operate from the same location, commingle assets, and fail to maintain cor- porate formalities, the bankruptcy court granted the trustee’s mo- tion to substantively consolidate them. Because the bankruptcy court had the power to make that determination and any proce- dural error in granting the motion was harmless, we affirm. I. BACKGROUND Donald Smith owns and operates No Rust Rebar. Smith also owns and controls four other entities: Raw Materials, Raw Energy Materials, Global Energy Sciences, and Raw. He is the “sole officer and Director” of Raw Materials and Raw Energy Materials and the “sole and managing member” of Global Energy Sciences and Raw. Smith described No Rust and the non-debtor entities as “a family” that works together to produce and sell products made from basalt USCA11 Case: 24-13383 Document: 39-1 Date Filed: 06/01/2026 Page: 3 of 7 24-13383 Opinion of the Court 3 fiber. Each entity has the same principal place of business except Global Energy Sciences, which lists the address for Smith’s home. No Rust filed a voluntary Chapter 11 bankruptcy petition in 2021. A creditor moved to convert the case to a Chapter 7 liquida- tion. As part of that proceeding, Smith was deposed as the corpo- rate representative for each of the non-debtor entities. The bank- ruptcy court then held a four-day evidentiary hearing at which Smith testified based on his knowledge as the representative of each of the non-debtor entities. After the evidentiary hearing, the bankruptcy court con- verted the case to a Chapter 7 liquidation. In its conversion order, it found that No Rust and the non-debtor entities are “a group of commingled entities whose responsibilities, assets, and liabilities were constantly shuffled to fit Smith’s needs or whi