Tuesday, July 1, 2014

9th Cir BAP Vacates and Remands Denial of Discharge back to BK Court to Make Specific Findings of Fact - 9th Cir. BAP - Unpublished 2014

It appears that the Court may have had a bad debtor on its hands and was frustrated with the actions taken by the debtor.  As a result, after a trial on the case, the Court denied the debtor a discharge under 727(a)(5), 727(a)(2) and 727(a)(4)(A).  The problem was that the Court did not make specific findings on the elements of the cause of action. 

727(a)(2) - the Court never determined that the assets that were concealed were property of the Estate.  The Debtor argued that the property belonged to a corporation.

727(a)(5) - Same Issue, the failure to explain the disposition of the assets....the question was were they property of the estate or the corporation.

727(a)(4)(A) - The Court needed to make a determination as to whether the debtor knowingly and fraudulently made a false oath (clearly the statement was false...but knowingly and fraudulently but more importantly the false oath pertained to a prior bankruptcy case and such false statement in the prior case were not actionable in the new case...citing to In re Carter, 125 B.R. 631, 634 (Bankr. D. Utah 1991)?)

In essence, the Court needed to make specific findings to support the denial of the discharge.  I'd suggest that the BK Court will make such findings the second time around.

In re Sethi - 2014 - 9th Cir. BAP

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