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. The tools had been stored in the trailer, located at the house belonging to the Debtor’s father, and the Debtor testified that he had forgotten them until asked at the §341 Meeting.
To deny a debtor a discharge under 11 U.S.C. § 727(a)(4)(A), the objecting party must show:
1. The debtor made a statement under oath;
2. The statement was false;
3. The debtor knew the statement was false;
4. The debtor made the statement with fraudulent intent; and
5. The statement related materially to the bankruptcy case.
The bankruptcy court found that the Debtor had made a false statement under oath. The assets worth $2,917.50 were not de minimus. Further, the actions of the Debtor, including relocating the assets to his father’s house, were evidence of the Debtor’s fraudulent intent.
Commentary:
The proceeds from the sale of the non-disclosed horse trailer, tools and a fully disclosed lawn tractor, would, after deduction of the Trustee’s commission and auction costs (and without consideration the inevitable attorneys’ fees for the Trustee’s counsel), leave $3,692.25 for creditors. This material non-disclosure will result in the partial payment of the otherwise non-dischargeable tax debt $4,226.27 and nothing for the otherwise dischargeable $29,989.38 in unsecured claims in this case.
For a copy of the opinion, please see:
Bircher v. Dudley- Denial of Discharge under 11 U.S.C. § 727(a)(4)(A) for failure to disclose assets.pdf
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