Skavysh v. Katsman (In Re Katsman)
771 F.3d 1048
| 7th Cir. | 2014Background
- Katsman filed Chapter 7 bankruptcy; trustee reported no assets for distribution and discharge looked likely.
- Skavysh, Katsman’s ex-husband’s son, filed an adversary proceeding to challenge discharge under 11 U.S.C. § 727(a)(4)(A) for false oath.
- Bankruptcy judge found omissions in Schedule F but deemed them not fraudulent and preferred Katsman’s testimony.
- District court reversed, holding the omissions were fraudulent and Katsman not entitled to discharge; Katsman appeals.
- Key issue is whether false statements and omissions in bankruptcy filings can constitute a fraudulent false oath, and whether they are material.
- Court concludes omissions support a finding of fraud; deception need not be aimed at pecuniary gain, and materiality and finality of the order are addressed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether omissions in Schedule F satisfy § 727(a)(4)(A). | Skavysh | Katsman | Yes; omissions can constitute fraudulent false oath. |
| Whether fraudulent intent requires intent to obtain pecuniary benefit. | Skavysh | Katsman | Fraudulent intent includes intent to deceive, not only pecuniary gain. |
| Whether Katsman’s omissions were material to the bankruptcy case. | Skavysh | Katsman | Material; the debtor must disclose creditors unless immaterial. |
| Whether the order denying discharge in the adversary proceeding was final and appealable. | Skavysh | Katsman | Final and appealable as a final order under 28 U.S.C. § 158(a)(1). |
Key Cases Cited
- Stamat v. Neary, 635 F.3d 974 (7th Cir. 2011) (fraudulent intent can be shown by reckless indifference to the truth)
- United States v. Gellene, 182 F.3d 578 (7th Cir. 1999) (fraudulent means to deceive need not be pecuniary in nature)
- United States v. Sabbeth, 262 F.3d 207 (2d Cir. 2001) (fraudulent intent includes deception in bankruptcy context)
- United States v. Lindholm, 24 F.3d 1078 (9th Cir. 1994) (materiality requirement for false statements in bankruptcy)
- United States v. Key, 859 F.2d 1257 (9th Cir. 1988) (bankruptcy proceedings require knowledge of creditors; omissions matter unless immaterial)
- Zedan v. Habash, 529 F.3d 398 (7th Cir. 2008) (discrete, adversary-level order can be final and appealable)