466 B.R. 737
Bankr. W.D. Pa.2012Background
- Debtor Danielle L. Barbe filed a Chapter 7 petition on September 9, 2010.
- Ivory, Ivory Entertainment, LLC, and Ivory Productions, Inc. had a pre-petition contractual relationship with Debtor, managing and developing her music career.
- California state court litigation in 2009 addressed their contractual relationship; court allowed Ivory to pursue attorney fees but had not yet awarded any fees.
- Debtor scheduled three disputed claims of $327,000 each in Schedule F representing Ivory's asserted attorney-fee claim; these are arguably the same single claim against Debtor.
- Ivory objected to the Debtor’s Chapter 7 discharge under 11 U.S.C. § 727(a)(2)-(4) and sought to except Ivory’s claim from discharge under § 523(a)(2)(A).
- Ivory also objected to the Debtor’s amendments of Schedules B and C and her Statement of Financial Affairs, which Debtor had amended prior to trial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to object to discharge | Ivory is a pre-petition creditor. | Ivory lacks standing without a pre-petition claim. | Ivory has standing to object under § 727(a)(2)-(4). |
| § 727(a)(2) and related concealment/transfer | Debtor transferred/ concealed property within one year before filing. | Transfers were not made with fraudulent intent and concealment evidence is lacking. | Ivory failed to prove transfers were made with intent to hinder, delay, or defraud. |
| § 727(a)(3) concealment/falsification of documents | Debtor concealed or falsified documents revealing financial condition. | Any alleged concealment was unfounded or non-material. | Insufficient proof of concealment or falsification with required intent. |
| § 727(a)(4) false oaths | Debtor knowingly and fraudulently omitted or misstated information. | Omissions were not knowing and fraudulent; some items were immaterial or explained. | Debtor did not knowingly and fraudulently make false oaths. |
| § 523(a)(2)(A) nondischargeability of Ivory's claim | Attorney-fee claim arose from false pretenses/representations. | No actual fraud or intentional misrepresentation by Debtor; services not obtained by false pretenses. | Ivory's § 523(a)(2)(A) claim was not nondischargeable. |
Key Cases Cited
- In re Bailey, 375 B.R. 410 (Bankr.S.D. Ohio 2007) (claims framework and treatment of disputed pre-petition claims in bankruptcy)
- In re Hermanson, 273 B.R. 538 (Bankr.N.D. Ill. 2002) (definition and treatment of pre-petition claims)
- In re Bernard, 99 B.R. 563 (Bankr.S.D.N.Y. 1989) (false oaths must be knowing and lead to a material misstatement)
- In re Borreggine, 441 B.R. 467 (Bankr.W.D. Pa. 2011) (elements of nondischargeability under § 523(a)(2)(A))
- In re Schempp, 420 B.R. 637 (Bankr.W.D. Pa. 2009) (fraudulent intent and elements under § 523(a)(2)(A))
- In re Ali, 321 B.R. 685 (Bankr.W.D. Pa. 2005) (intent and knowledge required for § 523(a)(2)(A) claims)