dissenting.
At the outset, it is not entirely clear under what theory the Trustee argued, and the bankruptcy court determined, that BFLP and RHFP were Burwell’s alter egos. Although the Complaint summarily mentioned some of the elements of a finding of alter ego under Minnesota law (discussed below), the only authorities cited by the Trustee in the Complaint relate to the bankruptcy court’s equitable powers.2 On appeal, the Trustee states that the case was not grounded on a reverse veil piercing theory, but he does not specify on what legal theory it was grounded. If it was based solely on the bankruptcy court’s equitable powers, then the validity of the judgment is particularly dubious because the Eighth Circuit has expressly said that the question of whether to pierce a corporate veil is governed by state law,3 and that a bankruptcy court may not exercise its equitable powers to create substantive rights which do not exist under state law.4 Consequently, the majority reasonably presumes, as do I, that the finding of alter ego must have been based on Minnesota law.
That being said, as the majority states, while BFLP and RHFP may not challenge the sufficiency of the evidence that the bankruptcy court used in entering default judgment against them, they are permitted to contest the sufficiency of the Trustee’s Complaint and its allegations to support *838the judgment.5 “[F]acts which are not established by the pleadings of the prevailing party, or claims that are not well-pleaded, are not binding and cannot support the judgment.”6 In my view, the Trustee’s Complaint did not sufficiently support the bankruptcy court’s conclusions that BFLP and RHFP are Burwell’s alter egos under Minnesota law.
The majority correctly outlines the analysis used by Minnesota courts in determining whether an entity is the alter ego of an individual, which “focus[es] on factors such as the failure to observe corporate formalities, siphoning of funds by the individual, absence of corporate records, and the existence of the corporation as merely a facade for the individual.”7 Other factors include insufficient capitalization for purposes of corporate undertaking, nonpayment of dividends, and nonfunction-ing of other officers and directors.8 The Trustee’s Complaint alleges almost nothing about whether BFLP and RHLP observed corporate (partnership) formalities, other than to state generally that Burwell “controlled” them. There are no specific allegations as to Kelly’s or anyone else’s role in any of the partnerships’ decision-making processes. Nor does the Complaint mention capitalization or say anything about whether the partnerships had their own records. In addition, the Complaint does not spell out what assets each of the partnerships had or specifically state how the partnership assets were managed. As one example, the Complaint alleged that BFLP owned three parcels of real estate, but contained no allegations as to when or how those properties were acquired or how they were treated by the parties, such as whether Burwell or his ex-wife paid BFLP rent for the houses they lived in or how income and expenses relating to the investment property were handled. In fact, the Complaint alleged that “BFLP funds, directed by [Burwell], were used to maintain and enhance all three properties.” If BFLP was using its own funds to manage its own assets as alleged, even if Burwell directed such use, that would weigh against a finding that it was Burwell’s alter ego. And, although the Complaint alleged that Burwell ran his personal funds through the partnership accounts to protect those funds from creditors and vaguely alleged that he used some other unspecified BFLP funds for his personal affairs, the Complaint does not expressly allege that Burwell siphoned partnership funds or assets out of the partnerships.9 In sum, both the Complaint *839and the findings tracking that Complaint ignore many of the factors to be considered by Minnesota courts in determining whether any entity is the alter ego of an individual.
The Complaint also alleged that the purpose of either BFLP or RHLP, “other than to protect Burwell’s personal assets, is unclear.”10 Given the fact that veil piercing should be effected “only under limited circumstances,”11 an allegation that the partnerships have an “unclear” purpose does not support a finding that they were merely Burwell’s facade.
In addition, “[disregard of the corporate entity requires not only that a number of these factors be present, but also that there be an element of injustice or fundamental unfairness.”12 Other than pointing out Burwell’s misdeeds in funneling personal funds through the partnership accounts and alleged misstatements on his schedules, the Complaint states no facts to support a finding of injustice or fundamental unfairness to other parties, particularly as to whether any other owner or creditor of either of the two partnerships would be adversely affected by the finding of alter ego.13
Finally, as mentioned above, the Trustee states in his appeal brief that this is not a reverse veil piercing case, and his Complaint cited only the bankruptcy court’s equitable powers — and not veil piercing— as the basis for the determination that the partnership’s assets were Burwell’s assets. That may be because, although no one has yet raised the issue, the Trustee’s standing to bring an action to pierce the veil may be questionable since the Complaint does not allege that the debtor (Burwell) had any ownership interest in either of the two partnerships.14 In any event, the fact that the Complaint never mentions these theories bolsters the conclusion that the elements are not adequately set forth (i.e. they are not well-pleaded)15 in the Complaint.
I recognize that, as a general rule, failing to respond to a pleading precludes a party from raising issues on appeal. The BAP recently reiterated that general principle in Walton v. Sosne.16 However, as that case pointed out, there are exceptions to that general rule, such as “where the obvious result of following the rule would be a plain miscarriage of justice or would be inconsistent with substantial justice.”17 In my view, a default judgment for equita*840ble relief such as that sought by the Trustee here, based on a factually insufficient pleading, would be such an injustice. Hence, while courts should not be hesitant to enter default judgments, a defaulting party should not be prohibited from arguing on appeal that the complaint on which the judgment was based was factually insufficient. This comports with the rule enunciated in Kasden. In addition, I would also mention that this is not a case in which the defendants totally ignored the response deadline, since Burwell and Kelly both responded to the Complaint, albeit in their personal capacities. Since Burwell, acting pro se, filed an appeal of the judgment rather than a Rule 59 or 60 motion, the bankruptcy court never had the opportunity to consider his contentions as to why the partnerships initially failed to respond.
In sum, the allegations that Burwell tunneled his personal funds through partnership accounts to protect those funds from his creditors and used a signature stamp to do so, without more, do not support a finding that the partnerships — -in which he is not alleged to own any interest — are his alter ego. That is not to say that the Trustee would be unable to allege and prove that they are. Rather, as in Kas-den, it is my view that the Complaint simply lacks sufficient factual allegations to support such a finding. Under the circumstances, and given the drastic relief ordered in declaring the partnerships to be Burwell’s alter ego, I conclude that not requiring the Trustee to allege and prove the elements required by Minnesota law would be inconsistent with substantial justice. Consequently, I would remand the case to the bankruptcy court for such further proceedings as are appropriate.
. 11 U.S.C. § 105 and Pepper v. Litton, 308 U.S. 295, 304-05, 60 S.Ct. 238, 84 L.Ed. 281 (1939).
. Stoebner v. Lingenfelter, 115 F.3d 576, 579 (8th Cir.1997) ("Whether to pierce the corporate veil is a legal determination that, in our circuit, is governed by state law.").
.Johnson v. First Nat'l Bank of Montevideo, 719 F.2d 270, 274 (8th Cir.1983).
. Miller v. Kasden, 209 B.R. 236, 238-39 (8th Cir. BAP 1997) (also stating that "a defaulted defendant may always challenge the legal sufficiency of the complaint allegations”).
. Id. at 238.
. United States v. Scherping, 187 F.3d 796, 802 (8th Cir.1999). See also Victoria Elevator Co. v. Meriden Grain Co., 283 N.W.2d 509, 512-13 (Minn.1979) (setting out factors considered to be significant). "Alter ego” is often used synonymously with the term "reverse veil piercing.” See e.g., Miller & Schroeder, Inc. v. A.T. Gearman, 413 N.W.2d 194 (Minn.Ct.App.1987) (treating the two terms synonymously and applying a similar standard as that used in Scherping).
. Victoria Elevator, 283 N.W.2d at 512.
. I disagree with the majority's conclusion that the Complaint describes in detail how Burwell controlled the bank accounts of the two entities. For example, the Complaint alleges that, in the year prior to the filing of the bankruptcy petition, "it appears that more than $225,000 was deposited into and out of the RHFP Account” (Amended Complaint ¶ 23), but it says nothing about where that money came from or where it went, other than the $64,600 from the tobacco rights, and the five cash withdrawals. In any event, if Burwell transferred his own assets to either partnership, those transfers may be recoverable by the Trustee from those partnerships under specific provisions of the Bankruptcy *839Code (§§ 547 or 548) or state fraudulent conveyance statutes (as made applicable by § 544).
. Amended Complaint ¶ 10 (emphasis added).
. Groves v. Dakota Printing Servs., Inc., 371 N.W.2d 59, 62 (Minn.App.1985); Halverson v. Schuster, 132 B.R. 604, 608 (Bankr.D.Minn.1991).
. United States v. Scherping, 187 F.3d at 802 (quoting Victoria Elevator, 283 N.W.2d at 512).
. See Stoebner v. Lingenfelter, 115 F.3d 576, 579 n. 4 (8th Cir.1997) (holding that a court can disregard the corporate entity when the shareholder "owned all, or substantially all, of the stock, treated the property as his own, and, most importantly, [when] no shareholder or creditor would be adversely affected.”) (emphasis added).
. See Halverson v. Schuster, 132 B.R. 604 (Bankr.D.Minn.1991).
. Kasden, 209 B.R. at 238-39 ("facts which are not established by the pleadings of the prevailing party, or claims that are not well-pleaded, are not binding and cannot support the judgment”).
. Walton v. Sosne, 391 B.R. 827, 2008 WL 2952441 (8th Cir. BAP 2008).
. Seniority Research Group v. Chrysler Motor Corp., 976 F.2d 1185, 1187 (8th Cir.1992).