Case Explained: In Re: AEGIS ASSET MANAGEMENT, LLC Debtor. BAY UNITED HOLDINGS, LLC v. INXS 7, LLC

Court: United States Court of Appeals for the Eleventh Circuit Filed: 2026-07-24 Docket: 8:23-cv-02370-KKM The eleventh-circuit affirmed the district court’s affirmation of the bankruptcy court’s order disallowing three proofs of claim filed by Cloud 9 Properties, LLC. The court held that a creditor must demonstrate it has the right to enforce its claim at the time the proof of claim is filed. Applying de novo review and relying on Florida state law which governs the validity of claims in bankruptcy, the court determined that under Florida law, a party must be the owner or holder of a promissory note to foreclose on the associated mortgage. Because Cloud 9 failed to provide evidence that it owned the notes securing the debts when it filed its proofs of claim, and the opposing party’s objection was supported by substantial factual basis showing Cloud 9 did not acquire ownership until after the filing deadline, the claims were properly disallowed. The practical consequence is that the claims remain disallowed, meaning the properties sold free and clear of those liens, and the sale proceeds are not subject to distribution to Cloud 9 or its assignee, Bay United Holdings, LLC. Do It For The Case Law is a news reporting service. Nothing in this episode constitutes legal advice.