Bankr. E.D.N.C.: In re Long - Iqbal/Twombley Pleading for § 727(a)(2)(A)

Summary: Creditor, Two Olives, Inc., sought denial of the debtors’ discharge pursuant to 11 U.S.C. § 727(a)(2)(A) , asserting that“the debtor, with intent to hinder, delay, or defraud a creditor . . . has permitted to be transferred . . . property of the debtor, within one year before the date of the filing of the petition.” Prior to the filing of the Chapter 7, the Debtors had allowed three parcels of real property to be sold a t foreclosure- the Ridley property was purchased with a credit bid by the lienholder and the Male Debtor’s mother purchased the McCulloch and Anclote properties for $396,338 and $189,805.65, respectively. Two Olives alleged that the McCulloch property was worth $500,000 and the Anclote property $416,200, and the foreclosure sales, particularly to the Male Debtor’s mother, deprived the eventual bankruptcy estate of substantial equity. The Debtors moved to dismiss pursuant to Rule 12(b)(6). The bankruptcy court held that, while the case might not later survive a properly supported summary judgment motion, Two Olives had pled sufficient facts regarding the “badges of fraud” to meet the Iqbal/Twombley requirement of “enough facts to state a claim to relief that is plausible on its face.” For a copy of the opinion, please see: Long - IqbalTwombley Pleading for § 727(a)(2)(A)