535 B.R. 531
S.D.N.Y.2015Background
- Daniel Gordon, a Chapter 7 debtor, appeals a judgment sustaining the Trustee’s objections to discharge under §727(a)(2) and (a)(4).
- Bankruptcy Judge Gerber found Gordon concealed assets (transfers to AUStar, Citadel, and Wurk TS) and made false oaths in schedules and statements.
- The Trustee sought denial of discharge on concealment, transfer, and false oath theories, and the bankruptcy court denied discharge on these grounds.
- Gordon previously pled guilty in 2003 to wire fraud, money laundering, and conspiracy; he served a 22‑month prison term.
- Trial spanned two days with extensive exhibits; the court concluded Gordon’s concealment and misstatements were material and intentional.
- The district court affirmed, holding the bankruptcy court’s factual findings not clearly erroneous and the law applied correctly.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Gordon’s acts concealed assets under §727(a)(2). | Tese-Milner alleges concealment of transfers to AllStar, Citadel, and Wurk TS. | Gordon contends transfers were not concealed or were in the ordinary course. | Yes; concealment established under §727(a)(2). |
| Whether Gordon made false oaths under §727(a)(4). | Gordon knowingly and fraudulently misrepresented income and interests in Cascar and Citadel, among other items. | Gordon argues misstatements were non-material or inadvertent, or counsel‑driven. | Yes; multiple false Oaths proven, material to the estate. |
| Whether transfers to Citadel and Wurk TS were in the ordinary course of business. | Transfers were not ordinary course and were made to firms Gordon controlled. | Argues some transfers could be viewed as ordinary course. | Not in ordinary course; transfers were improper under §727(a)(2). |
Key Cases Cited
- Salomon v. Kaiser (In re Kaiser), 722 F.2d 1574 (2d Cir.1983) (badges of fraud and asset shifting considered in concealment context)
- Painewebber Inc. v. Gollomp (In re Gollomp), 198 B.R. 433 (S.D.N.Y.1996) (materiality and fraudulent intent standards in §727(a)(4))
- Gardner v. Gardner (In re Gardner), 384 B.R. 654 (Bankr.S.D.N.Y.2008) (materiality and intent in false oaths, especially multiple omissions)
- Klutchko (In re Klutchko), 338 B.R. 554 (Bankr.S.D.N.Y.2005) (improper disclosures and debtor’s duties under §727(a)(4))
- Pongvitayapanu (In re Pongvitayapanu), 487 B.R. 130 (Bankr.E.D.N.Y.2013) (materiality and omissions; aggregate omissions can deny discharge)