In a Published Decision, the 9th Circuit affirmed the determination that a fraud which would have served as grounds to deny a discharge could serve as grounds for the revocation of a discharge

The 9th Circuit affirmed the district court’ judgment, the panel held that a fraud that would have served as grounds for denying a chapter 7 bankruptcy discharge if it had been known at the time of the discharge could serve as grounds for the later revocation of that discharge.

The United States Trustee moved to revoke the discharge pursuant to 11 U.S.C. §727(d)(1), which provides that a chapter 7 discharge may be revoked if it was obtained through the fraud of the debtor and the requesting party did not know of the fraud until after the granting of the discharge.  The bankruptcy court found that the debtor’ misrepresentations of the value or existence of a number of assets in the schedules he filed and in the testimony he gave during the creditors meeting amounted to a violation of §727(a)(4)(A), which provides that a bankruptcy court should deny discharge if the debtor knowingly or fraudulently, in or in connection with the case, made a false oath or account.  The bankruptcy court granted the Trustee’ motion, and the district court affirmed.

The panel rejected the debtor’ argument that the concealment of his fraud, rather than the fraud itself, procured his discharge.  Adopting the reasoning of the Bankruptcy Appellate Panel and other circuits, the panel held that a material fraud, which would have resulted in the denial of a chapter 7 discharge had it been known at the time of such discharge, can justify subsequent revocation of that discharge under §727(d)(1).

9th Cir. In re Jones - Published