For the last 27 years, bankruptcy courts in the Ninth Circuit consistently held that debt could not be recharacterized as equity unless the movant proved inequitable conduct by the debt holder. On April 30, 2013, the Ninth Circuit Court of Appeals rejected that precedent and joined other circuit courts in holding that bankruptcy courts do have the authority to recharacterize a loan as an equity investment to the extent allowed under state law even without inequitable conduct.