In Re: Mattei
24-1261
2d Cir.Mar 11, 2025Background
- Angela Mattei, as executor, allegedly mismanaged the Keahon Estate; after her death, Brenda Wiley became administrator.
- Wiley obtained a $98,356.42 judgment plus interest against Angela Mattei's estate, claiming fraudulent conveyance of property to William and Tracy Mattei (Appellants).
- The Matteis filed for bankruptcy seeking to discharge any debts or claims to the Keahon Estate.
- Wiley objected, asserting the Matteis filed false income statements and that their debts should not be discharged.
- The Bankruptcy Court found the Matteis had knowingly filed false statements and denied their request for discharge under 11 U.S.C. § 727(a)(4)(A).
- The District Court affirmed, and the Matteis appealed to the Second Circuit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing under 11 U.S.C. § 727(c)(1) | Wiley was a creditor with a valid claim due to pending fraudulent conveyance actions | Wiley was not a creditor since they were not directly liable for the estate's debts | Wiley had statutory standing as a creditor with a valid claim |
| Article III Standing | The bankruptcy discharge would harm Wiley by extinguishing her claims | Wiley lacked Article III standing in bankruptcy proceedings | Wiley established Article III standing; injury was concrete and redressable |
| Discharge under § 727(a)(4)(A) | The Matteis knowingly filed false statements and should be denied discharge | Denied wrongdoing; objected discharge should be granted | False statements warranted denial of discharge |
| Effect of bankruptcy court's findings (res judicata) | Some state claims do not require proof of fraud | Bankruptcy findings bar Wiley's state court claims | Bankruptcy court findings did not extinguish all state court claims |
Key Cases Cited
- Johnson v. Home State Bank, 501 U.S. 78 (1991) ("Claim" in bankruptcy is broadly defined to include disputed or contingent rights to payment)
- Cohen v. de la Cruz, 523 U.S. 213 (1998) (Distinguishes between "claim" and "debt" in bankruptcy context)
- Spokeo, Inc. v. Robins, 578 U.S. 330 (2016) (Defines Article III injury requirements: concrete and particularized injury required)
- Czyzewski v. Jevic Holding Corp., 580 U.S. 451 (2017) (Standing for bankruptcy claimants; claim retains value even if ultimate success is uncertain)