《楊清泉律師專欄》DOCTOR’S BK DISCHARGE DENIED DUE RECKLESS DISREGARD FOR TRUTH(Part II)
楊清泉律師事務所
《楊清泉律師專欄》DOCTOR’S BK DISCHARGE DENIED DUE RECKLESS DISREGARD FOR TRUTH(Part I)
The bankruptcy court focused on the refinancing of the debtors vacation house and their failure to list all of their business interests. The court found that the cumulative effective of their false statements was material and established a pattern of reckless indifference to the truth. The District Court and the 7th Circuit Court of Appeals agreed. The Court of Appeals said that the continued existence of the businesses was not relevant to the disclosure requirement. “Question 18 of the SOFA asks for all business interests ‘within six years immediately preceding the commencement of this case,’ and in fact, asks for ‘beginning and ending dates’…” the court said. The 7th Circuit said there was nothing in the record to suggest that borrowing $10,000 and using the money to settle a disputed debt was something that debtors did on a regular basis. Refinancing was a closer call, but the fact that some of the money was used for personal reasons and some was used to operate the businesses meant the transfers were not in the regular course of business. In addition, the bankruptcy court found that the debtors had not accounted for all the proceeds from the refinancing. Section 727 (a)(5) denies discharge to a debtor who has “failed to explain satisfactorily…any loss of assets or deficiency of assets to meet the debtor’s liabilities."
The 7th circuit affirmed the bankruptcy court and District Court’s denial of discharge to doctor and his wife. Lawrence Bautista Yang is a graduate of Georgetown University Law Center and has been in law practice for thirty years. He specializes in bankruptcy, business and civil litigation and has handled more than four thousand successful bankruptcy cases in California. He speaks Mandarin and Fujien and looks forward to discussing your case with you personally. Please call (626) 284-1142 for an appointment at 1000 S Fremont Ave Bldg A-1 Suite 1125 Unit 58 Alhambra, CA 91803.
The bankruptcy court focused on the refinancing of the debtors vacation house and their failure to list all of their business interests. The court found that the cumulative effective of their false statements was material and established a pattern of reckless indifference to the truth. The District Court and the 7th Circuit Court of Appeals agreed. The Court of Appeals said that the continued existence of the businesses was not relevant to the disclosure requirement. “Question 18 of the SOFA asks for all business interests ‘within six years immediately preceding the commencement of this case,’ and in fact, asks for ‘beginning and ending dates’…” the court said. The 7th Circuit said there was nothing in the record to suggest that borrowing $10,000 and using the money to settle a disputed debt was something that debtors did on a regular basis. Refinancing was a closer call, but the fact that some of the money was used for personal reasons and some was used to operate the businesses meant the transfers were not in the regular course of business. In addition, the bankruptcy court found that the debtors had not accounted for all the proceeds from the refinancing. Section 727 (a)(5) denies discharge to a debtor who has “failed to explain satisfactorily…any loss of assets or deficiency of assets to meet the debtor’s liabilities."
The 7th circuit affirmed the bankruptcy court and District Court’s denial of discharge to doctor and his wife. Lawrence Bautista Yang is a graduate of Georgetown University Law Center and has been in law practice for thirty years. He specializes in bankruptcy, business and civil litigation and has handled more than four thousand successful bankruptcy cases in California. He speaks Mandarin and Fujien and looks forward to discussing your case with you personally. Please call (626) 284-1142 for an appointment at 1000 S Fremont Ave Bldg A-1 Suite 1125 Unit 58 Alhambra, CA 91803.
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