Gargula v. Cox (In re Cox)

(Bankr. S.D. Ind. Sep. 7, 2017)

The bankruptcy court enters judgment in favor of the debtor, granting a discharge in her bankruptcy case. The U.S. Trustee brought the action under § 727(a)(2)(B) and (a)(4)(A), alleging the debtor intentionally failed to disclose $5,000 she held in a lockbox on the petition date. The Court finds the debtor did not have the requisite intent and was unsure of what she was supposed to do at the 341 meeting based on a misunderstanding or miscommunication with her lawyer. Opinion below.

Judge: Carr

Attorney for U.S. Trustee: Jeanette Eisan Hinshaw

Attorney for Debtor: Joseph L. Mulvey

2017-09-07 – in re cox

Author: Matt Lindblom

 

HIJ Industries, Inc. v. Roy (In re Roy)

(Bankr. E.D. Ky. Jan. 26, 2017)

The bankruptcy court enters judgment in favor of the debtor, dismissing claims under 11 U.S.C. § 523(a)(6) and § 727(a)(2)(A). The plaintiff argued that the debtor executed a scheme that intentionally injured the plaintiff because the debtor became unable to pay on promissory notes. The Court finds that the plaintiff did not establish that the debtor willfully and maliciously injured the plaintiff. Also, while the debtor had transferred title to a truck from his sole ownership to joint ownership with his wife within a year of the bankruptcy petition, the plaintiff failed to establish the requisite intent. Opinion below.

Judge: Wise

Attorney for Plaintiff: Tricia A. Shackelford

Attorney for Debtor: John M. Simms

2017-01-26-in-re-roy

Author: Matt Lindblom

In re McWhorter

(Bankr. E.D. Ky. Sept. 14, 2016)

The bankruptcy court denied debtor’s discharge under Sections 727(a)(2) and (a)(4) at the request of the UST. Debtor failed to disclose a corvette, a motor home, and a boat and trailer on Schedule B, asserting they were sold to his father in January 2013, but the UST showed that transfer and certificate of title documentation was not executed until October 2014, just over a month before debtor filed bankruptcy. Debtor maintained possession of those assets. Debtor also failed to disclose his ownership of four complete sets of tickets for the 2014-2015 UK men’s basketball season, as well as numerous other assets. Debtor’s testimony on the status, ownership and disposition of all these assets was inconsistent and led to credibility issues according to the court. The court also discussed the UST’s claim under Section 727(a)(5). A March 2013 financial statement by debtor listed assets of $10.5 million, but his November 2014 petition identified just $415,000 in assets. Even though the court did not have to rely on the 727(a)(5) claim, as denial of discharge was already warranted under 727(a)(2) or (a)(4), the court noted a discussion of the UST’s 727(a)(5) claim was valuable as it supported the (a)(2) and (a)(4) claims.

Judge: Schaaf

Attorney for Debtor: Michael Baker

Attorney for UST: Bradley Nederman

Author: Robert K. Imperial

2016-09-14-in-re-mcwhorter

HIJ Industries, Inc. v. Roy (In re roy)

(Bankr. E.D. Ky. Mar. 21, 2016)

The bankruptcy court denies the debtor’s motion to dismiss the complaint seeking to deny the debtor a discharge under 11 U.S.C. § 727(a)(2)(A) or alternatively to except the creditors claim from discharge under § 523(a)(6). The debtor argued that the creditor failed to state a claim because the complaint only alleged that the debtor caused injury to his own business rather than to the creditor itself. The court disagrees, holding the debtor’s actions to remove property from his business could be the basis for a claim under § 523(a)(6). The debtor also argued that the creditor failed to plead the requisite intent for § 727(a)(2), but the court disagrees and denies the motion to dismiss. Opinion below.

Judge: Wise

Attorney for Debtor: John M. Simms

Attorney for Plaintiff: Tricia A. Shackelford

2016-03-21 – in re roy

Author: Matt Lindblom

In re Marcus-Rehtmeyer

(7th Cir. Apr. 28, 2015)

The Seventh Circuit reverses the district court’s order affirming the bankruptcy court’s order denying the creditor’s objection to the debtor’s discharge. The creditor obtained a judgment against the debtor in state court and conducted post-judgment discovery to collect on the judgment. The debtor omitted assets in her responses to the discovery requests and then filed a Chapter 7 petition. The bankruptcy court found that the debtor’s explanations for the omissions were credible and denied the discharge objection. The Seventh Circuit reverses, finding the bankruptcy court’s findings were clearly erroneous. Opinion below.

2015-04-28 – in re marcus-rehtmeyer

Author: Matt Lindblom

Wells v. Lorenz (In re Lorenz)

(Bankr. N.D. Ind. Nov. 6, 2014)

The bankruptcy court denies the debtor’s motion to dismiss the complaint seeking to declare a particular debt nondischargeable under 11 U.S.C. § 523(a)(2) and denial of the discharge generally under § 727(a)(2). The plaintiff alleged that the debtor misrepresented his ownership interest in certain property. The debtor argued this was a statement of financial condition and that because it was not in writing it could not support a denial of discharge under § 523(a)(2). The bankruptcy court holds that statements related to an interest in property are not statements of financial condition, and the alleged misrepresentation was sufficient to state a claim under § 523(a)(2). The plaintiff also alleged the debtor was the alter ego of his corporation, and that the debtor caused the corporation to transfer property without consideration to another entity. The debtor argued the plaintiff failed to state a claim under § 727(a)(2) because the property transferred was not property of the debtor. The bankruptcy court held that a claim was properly stated because the plaintiff alleged the corporation was the alter ego of the debtor and thus the property was alleged to be property of the debtor. Opinion below.

2014-11-06 – wells v lorenz

Eifler v. Wilson & Muir Bank & Trust Co.

(6th Cir. Dec. 8, 2014)

The Sixth Circuit affirms the district court, which affirmed the bankruptcy court’s decision to deny the individual debtor’s discharge under 11 U.S.C. §§ 727(a)(2)(A) and (a)(4). The court holds that the advice of counsel defense does not apply here because the debtor had not made full disclosure of all pertinent facts to his attorney. The debtor omitted numerous transfers and accounts from his schedules and had disposed of most of his assets prior to filing bankruptcy. The bankruptcy court’s factual finding of fraudulent intent was not clearly erroneous. Opinion below.

2014-12-08 – eifler v wilson and muir