Tag: disclosure

Bankr. E.D.N.C.: In re Branch- Sanctions for Disclosure of Personal and Medical Information in Proof of Claim

Summary:

Following the disclosure in more than 4,200 Proofs of Claim by Wake Med of personal identifying information, several Debtors sought sanctions for violations of Federal Rule of Bankruptcy Procedure 9037, HIPAA, and 11 U.S.C. §107.

The bankruptcy court held that it was not a “HIPAA compliance tribunal” and might not have jurisdiction to decide such claims. Further, “[t]he case law overwhelmingly holds that there is no private right of action under HIPAA or §107 ”, leaving Rule 9037 as the primary remedy. Where, however, ““it was shown that a creditor flaunted the law with knowledge of its proscriptions, failed to take remedial action once violations were discovered, or acted deliberately as opposed to mistakenly or inadvertently”, Carter v. Read More

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W.D.N.C.: In re Meabon- Frivolous Appeal; Failure to Disclose Assets

Summary:

Prior to filing bankruptcy, the Meabons first consulted with an attorney who informed them that they would need to disclose, as an asset in his bankruptcy schedules, Richard Meabon’s interest in a trust. As a result of the first attorney’s advice, the Meabons chose to file with another attorney, to whom they did not disclose the existence of the trust. After filing Chapter 7 without disclosure of the trust either in their petition or at the §341 Meeting of Creditors, the deadline to object to discharge passed on June 1, 2010. On June 2nd or 3rd, the first attorney notified the second, who, over the objection of the Meabons, alerted the Chapter 7 Trustee, who ultimately obtained the revocation of their discharge.… Read More

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Bankr. W.D.N.C.: In re Nelson- Denial of Objection to Conversion from Chapter 7 to Chapter 13

Summary:

The Chapter 7 Trustee discovered that the Female Debtor was the 50% beneficiary of her late father’s springing trust, with her share being worth approximately $100,000, that had not been listed in the petition. The Trustee also cam to believe, based on a valuation by a realtor, that real property valued at $10,000 by the Debtors was actually worth as much as $44,900. After discovery and belated disclosure of these, the Debtors sought to convert their case to Chapter 13, with the Trustee objecting. At the hearing on the conversion, the Male Debtor testified that he had based the value of the real property on the opinion of another realtor.… Read More

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Bankr. E.D.N.C.: Bircher v. Dudley- Denial of Discharge under 11 U.S.C. § 727(a)(4)(A) for failure to disclose assets

Summary:

The Trustee sought a denial of discharge, claiming the Debtor, with the intent to hinder, delay, or defraud, concealed property of the estate and knowingly and fraudulently, in connection with a case, made a false oath. At the §341 Meeting, in response to questions from the attorney for the his estranged spouse, the Debtor admitted that he owned a $2,000 horse trailer and a grease gun, wrenches, a pressure washer, a generator, an air compressor, and a tool chest filled with tools, worth approximately $800.00. (These assets were sold at auction for $2,917.50.)

The Debtor contended he did not disclose the horse trailer in his petition or initially at the §341 Meeting because it was not titled in his name.… Read More

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Bankr. M.D.N.C.: In re Abdelaziz- Denial of Discharge under 11 U.S.C. § 727(a)(2) for concealment of assets

Summary:

The Debtor’s corporation filed Chapter 7 and the Debtor agreed to buy the assets of the corporation from the Chapter 7 Trustee for $3,400.00.  The Trustee was later contacted by an auctioneer, who informed the Trustee that the Debtor was attempting to sell additional corporate assets, that had not be listed in the bankruptcy petition filed by the corporation.  The Debtor eventually did sell these non-disclosed assets for $4,000.00 and also filed his own personal Chapter 7 bankruptcy, with the same Trustee being appointed.  The Trustee eventually settled with the Debtor for an additional $2,300.00, but then brought an adversary proceeding to deny the Debtor his discharge pursuant to 11 U.S.C.… Read More

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Bankr. E.D.N.C.: In re Harper- Denial of Motion to Convert from Chapter 7 to Chapter 13 Due to Bad Faith

Summary:

The Chapter 7 Debtors failed to disclose in their petition their interests in various real estate partnerships and multiple foreclosure proceedings, which the Chapter 7 Trustee discovered through reviewing the Debtors’ tax return and public records.  The Debtors then sought to convert to Chapter 13 and the Chapter 7 Trustee objected.

The Court held the Debtors  initial schedules were so misleading as to give rise to an inference  of bad faith, which in turn prevents conversion. Marrama v. Citizens Bank of Massachusetts, 549 U.S. 365 (2007).  The debtors argued that providing the 2009 tax return, which disclosed some of the missing items, demonstrates they were not purposefully concealing matters from the Trustee. … Read More

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