549 B.R. 576
Bankr. N.D.N.Y.2016Background
- Debtor Pierre T. Beaudry II, a sophisticated former securities salesperson and real‑estate investor with multiple prior bankruptcies, filed chapter 7 in November 2014.
- Beginning in May 2014 Debtor obtained $70,000 from friend/associate Roger Berman; $60,000 was wired to Debtor's live‑in partner Ling Wang to cure mortgage arrears on the residence they shared; $10,000 was spent but not accounted for.
- Debtor admitted he lied to Berman about the purpose and repayment of the loan and directed the funds to Wang’s account.
- In his schedules and SOFA Debtor: (a) listed a $70,000 unsecured debt to Berman, (b) omitted any receivable from Wang (the Wang Receivable), (c) omitted the Wang Transfer, and (d) omitted disclosure of certain consulting/brokerage business ventures.
- Debtor produced limited documentary records (2013 tax returns and a 19‑page brochure) and failed to produce 2014 tax documents, bank records, or other papers requested in a court‑ordered Rule 2004 exam.
- The United States Trustee moved for summary judgment, unopposed; the court deemed the Trustee’s facts admitted and granted summary judgment denying Debtor a discharge under 11 U.S.C. § 727(a)(2)(A) & (B), (3) and (4).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §727(a)(2)(A) bars discharge for transfers within one year with intent to hinder, delay or defraud | Beaudry transferred $70,000 to Wang within year before filing, retained benefit/use of residence, lied about purpose — badges of fraud show intent to defraud Berman | No opposition; Debtor made admissions but offered no contrary justification | Granted — transfer inferred fraudulent; §727(a)(2)(A) satisfied |
| Whether §727(a)(2)(B) bars discharge for concealment of estate property after filing | Debtor concealed the Wang Receivable (an asset) on schedules/SOFA, despite listing Berman debt — shows intent to hinder creditors | No opposition; Debtor produced none of the required disclosures | Granted — concealment of estate property with requisite intent proven |
| Whether §727(a)(3) bars discharge for failure to keep/preserve records | Debtor produced minimal documents, no bank records or accounting for the $10,000, no 2014 returns or business records — impossible to ascertain financial condition | No defense offered; Debtor gave no justification for lack of records | Granted — inadequate records and no justification; §727(a)(3) satisfied |
| Whether §727(a)(4) bars discharge for false oaths or accounts | Debtor made material false statements/omissions under oath (omitting Wang Receivable, Wang Transfer, business ventures, inconsistent 341 testimony) with knowledge and fraudulent intent | No opposition; Debtor's experience and prior bankruptcies support inference of intent | Granted — all elements of §727(a)(4) proven by preponderance |
Key Cases Cited
- Grogan v. Garner, 498 U.S. 279 (general proposition that plaintiff bears burden to prove nondischargeability by preponderance)
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment framework)
- Salomon v. Kaiser (In re Kaiser), 722 F.2d 1574 (family transfers while insolvent as badge of fraud)
- Marrama v. Citizens Bank, 445 F.3d 518 (inference of fraudulent intent in transfer cases)
- Underhill v. Royal, 82 F.2d 258 (record‑keeping and disclosure reasonableness standard)