Riggins v. Ambrose
500 B.R. 190
N.D. Ga.2013Background
- May 6, 2010, debtor demanded unpaid distributions from 25% ownership in two companies.
- May 28, 2010, debtor filed Chapter 7 petition alleging a no-asset case and no ownership interests in the companies.
- August 19, 2010, bankruptcy trustee filed a report of no distribution; estate was closed and debtor discharged under 11 U.S.C. § 727.
- Three months after discharge, debtor sued in state court seeking distributions from the companies.
- Riggins filed a state-action motion for summary judgment alleging judicial estoppel due to nondisclosure in bankruptcy.
- Debtor sought to reopen the bankruptcy proceeding to pursue the asset for creditors; bankruptcy court reopened and reserved estoppel issues; on appeal, the district court reversed and remanded for evidentiary hearing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether reopening required proof of debtor's good faith. | Riggins contends good faith is relevant and should be shown. | Debtor argues good faith is not required for reopening. | Remanded for evidentiary development; not resolved on this issue. |
| Whether the bankruptcy court erred by not requiring evidence of debtor's intent to disclose. | Riggins argues intentional nondisclosure supports estoppel and impacts reopening. | Debtor contends intent is not a mandatory reopening factor. | Court requires fuller record and consideration of debtor's intent on remand. |
| Whether there is sufficient record to determine the factors for reopening. | Riggins seeks reassessment with clear factual findings. | Debtor argues existing record suffices to deny or grant reopening. | Remand to develop an evidentiary record and provide specific findings. |
| What role judicial estoppel and undisclosed assets play in the reopening decision. | Riggins argues estoppel and asset value influence reopening. | Debtor argues estoppel should be handled separately in state action. | Remand with guidance to consider estoppel within full evidentiary record. |
Key Cases Cited
- Burnes v. Pemco Aeroplex, Inc., 291 F.3d 1282 (11th Cir. 2002) (full disclosure vital; nondisclosure risks estoppel and creditors' interests)
- Parker v. Wendy’s Int’l, Inc., 365 F.3d 1268 (11th Cir. 2004) (trustee ownership can affect estoppel analysis; non-disclosure may be inadvertent)
- In re Upshur, 317 B.R. 446 (Bankr.N.D.Ga.2004) (reopening factors; debtor intent relevant to reconsideration)
- In re Rochester, 308 B.R. 596 (Bankr.N.D.Ga.2004) (consider intent behind nondisclosure; may still reopen if justified)
- In re Lopez, 283 B.R. 22 (9th Cir. BAP 2002) (debtor’s intent weighed; bad faith may be outweighed by other factors)