The Ninth Circuit has joined the majority of Circuit Courts in holding that bankruptcy courts have the authority to recharacterize alleged debts as equity. See Official Comm. of Unsecured Creds. v. Hancock Park Capital II, L.P. (In re Fitness Holdings Int’l, Inc.), No. 11-56677, --- F.3d ----, 2013 WL 1800000 (9th Cir. April 30, 2013). In doing so, the appellate court has explicitly reversed the contrary precedent of In re Pacific Express, Inc., 69 B.R. 112, 115 (B.A.P. 9th Cir. 1986). The court also announced that it would join the Fifth Circuit in holding that state rather than federal law would provide the applicable test for determining when to recharacterize a debt as equity. See In re Lothian Oil, 650 F.3d 539, 543 (5th Cir. 2011).