Fido's Fences, Inc. v. Bordonaro (In re Bordonaro), 543 B.R. 692

Debtor James Bordonaro filed Chapter 7 on Jan. 20, 2014, one day before a scheduled foreclosure sale on his Bay Shore real property; Fido’s Fences held a prepetition judgment and recorded liens and filed an adversary complaint seeking denial of discharge under § 727.
Bordonaro’s original schedules/SOFA misstated assets, income, bank account balances, business ownership, and listed Fido’s as an unsecured creditor despite a recorded lien.
Bordonaro filed multiple amendments to schedules and the SOFA after the creditor’s complaint and the trustee’s discovery-of-assets notice; amendments changed income, rental receipts, creditor classification, and listed business interests.
At trial debtor produced redacted bank statements (payors/payees and amounts obscured), failed to produce a court-ordered cash log, and belatedly produced previously undisclosed bank statements contradicting earlier sworn statements.
Court found debtor’s explanations (trade‑secret redactions, innocent mistakes, reliance on prior counsel) not credible and concluded amendments were responsive to litigation rather than inadvertent corrections.
Court denied discharge under 11 U.S.C. § 727(a)(3) (failure to preserve/produce records) and § 727(a)(4)(A) (false oaths); claim under § 727(a)(4)(B) (presenting a false claim) was dismissed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether discharge should be denied under § 727(a)(3) for failing to keep or produce records	Bordonaro redacted bank statements, failed to produce a cash log and other business records, making it impossible to reconstruct finances	Redactions protected trade secrets; omissions were inadvertent or due to counsel; records existed but were not produced timely	Denied discharge under § 727(a)(3): redactions and failure to produce cash log unjustified; records inadequate to ascertain financial condition
Whether discharge should be denied under § 727(a)(4)(A) for false oaths in schedules/SOFA	Multiple material false statements/omissions (income, accounts, business ownership, liens) were made under penalty of perjury and known by debtor	Inaccuracies were innocent mistakes and later corrected by amendments; some errors attributable to prior counsel	Denied discharge under § 727(a)(4)(A): false statements were material, debtor knew they were false, and credible explanations were lacking; fraudulent intent may be inferred
Whether discharge should be denied under § 727(a)(4)(B) for presenting or using a false claim	Scheduling Fido’s as unsecured constituted a false/insolvent claim presentation	Scheduling error did not inflate or create a fictitious claim; no evidence of presenting an inflated/fictitious claim	Dismissed § 727(a)(4)(B) claim: scheduling error did not amount to presenting an inflated or fictitious claim

State Bank of India v. Chalasani, 92 F.3d 1300 (2d Cir. 1996) (§ 727 construed strictly against objector and liberally for debtor)
D.A.N. Joint Venture v. Cacioli, 463 F.3d 229 (2d Cir. 2006) (two‑step test for § 727(a)(3) recordkeeping; discharge depends on true presentation of financial affairs)
In re Colish, 289 B.R. 523 (Bankr. E.D.N.Y. 2002) (plaintiff must prove § 727 elements by preponderance)
In re Jacobowitz, 309 B.R. 429 (S.D.N.Y. 2004) (recordkeeping burden‑shifting discussion under § 727(a)(3))
In re Sethi, 250 B.R. 831 (Bankr. E.D.N.Y. 2000) (creditor may prove inadequacy of records or impossibility of ascertaining financial condition from records)
Carlucci & Legum v. Murray (In re Murray), 249 B.R. 223 (E.D.N.Y. 2000) (elements required to prove false oath under § 727(a)(4)(A))
In re Gannon, 173 B.R. 313 (Bankr. S.D.N.Y. 1994) (petition and schedules are statements under oath for § 727(a)(4)(A))
In re Adler, 395 B.R. 827 (E.D.N.Y. 2008) (omissions qualify as false statements under § 727(a)(4)(A))
In re Antoniou, 515 B.R. 9 (Bankr. E.D.N.Y. 2014) (materiality for false oath concerns discovery of assets and business dealings)