Georgen-Running v. Grimlie (In Re Grimlie)
439 B.R. 710
| 8th Cir. BAP | 2010Background
- Debtor Larry Grimlie filed for Chapter 7; three orders challenged in consolidated appeals.
- Bankruptcy Court denied discharge under § 727(a)(2) and (a)(4)(A) for concealment, transfers, and false oath.
- Trustee objected to exemptions (homestead, farming equipment) and sought avoidance of transfers to wife Linda and children.
- Transfers included moving assets to Linda and children within/around filing period to protect assets from Thorud judgment.
- Trustee sought sale of the homestead under § 363(h) after severance of joint tenancy in the bankruptcy.
- Court also addressed cross-border Minnesota exemption statutes for homestead, farming equipment, and a 2003 pickup.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the bankruptcy court properly deny discharge under § 727(a)(2) and (a)(4)? | Trustee argued concealment and false oath warrant denial. | Grimlie challenged factual findings and asserted error in exemptions overruling. | Discharge denial affirmed. |
| Were transfers to Linda and children avoidable under § 548 and recoverable under § 550? | Trustee alleged fraudulent transfers to shield assets from Thorud and others. | Grimlie contended lack of fraud or improper transfers. | Transfers found avoidable and recoverable; affirmed. |
| Are additional transfers avoidable under § 544/550 and Minnesota statutory provisions 513.44, 513.47? | Trustee relied on Minnesota fraudulent-transfer provisions to reach assets. | Grimlie disputed the application of state-law theories to the bankruptcy estate. | Minnesota-based transfers avoided; affirmed. |
| Did the trustee have authority to sell the homestead under § 363(h) after severance of joint tenancy? | Trustee sought to maximize estate recovery by selling the property free of co-owner interests. | Grimlie challenged the breadth of the sale order. | Authority to sell under § 363(h) affirmed. |
| Were exemptions properly determined and limited (homestead, animals, farming equipment, and 2003 Chevrolet)? | Trustee argued exemptions exceeded statutory limits or were unsupported by use. | Grimlie contended broad exemptions based on agricultural use and business activity. | Exemption rulings upheld; certain limits affirmed. |
Key Cases Cited
- In re Bieniek, 417 B.R. 133 (Bankr.D.Minn.2009) (fraud presumption and intent elements under § 727 analyzed)
- City Nat'l Bank of Ft. Smith v. Bateman, 646 F.2d 1220 (8th Cir. 1981) (elements of § 727(a) burden and proof requirements)
- The Abbott Bank-Hemingford v. Armstrong, 931 F.2d 1233 (8th Cir. 1991) (fraud indicators and intent in bankruptcy contexts)
- O'Hagan v. U.S., 86 F.3d 776 (8th Cir. 1996) (joint tenancy severance and survivorship implications in bankruptcy)
- In re Korte, 262 B.R. 464 (8th Cir. BAP 2001) (analysis of intent and false statements in § 727 proceedings)
- In re DLC, Ltd., 295 B.R. 593 (8th Cir. BAP 2003) (conduit use of § 544 and state-law fraudulent-transfer actions)
- In re Sandiford, 394 B.R. 487 (8th Cir. BAP 2008) (state-law fraud standards in bankruptcy context)
- Unruh v. Rasmussen, 278 B.R. 796 (Bankr.D.Minn.2002) (evidence and circumstantial proof of fraud in § 727(a))