Mr. And Mrs. Cox, through their then attorney, entered into a settlement agreement in a civil forfeiture action brought for the collection of taxes, wherein they agreed to pay the government more than $3 million and granted Deeds of Trust against thirty-five tracts of land located throughout Alabama and North Carolina. After entering into this settlement, the government then initiated criminal prosecution of both of the Coxes and they subsequently pleaded guilty, with Mr. Cox being sentence to 33 months imprisonment, Mrs. Cox to 3 years probation, and each being fined $50,000. The when the Coxes failed to pay the agreed amount (perhaps in part because they were in prison), the government sought to judicially foreclose on the properties.… Read More
Following a foreclosure, appeal of the foreclosure to the North Carolin Court of Appeals (which was dismissed for failure by the homeowner to comply with deadlines), an unconsummated foreclosure bid by the homeowner’s daughter, and two civil suits in state court, the Debtor eventually filed Chapter 13 (twice). Not surprisingly, Wells Fargo had lost patience with the Debtor and sought not only relief from the automatic stay as to the Debtor, but also in rem relief against the real property itself under 11 U.S.C. § 362(d)(4). Relief from stay was granted as to the Debtor.
Regarding the in rem relief, the Court found that § 362(d)(4) required that the Debtor’s actions in “filing of the petition [were] part of a scheme to delay, hinder, and defraud creditors” (Emphasis added) “that involved … multiple bankruptcy filings affecting such real property.” (Emphasis again added.) The Court then recognized that while some courts have used the traditional elements of fraud, others have held that fraud “embraces all the multifarious means which human ingenuity can devise and which are resorted to by one individual to gain advantage over another .… Read More