641 F.3d 1209
10th Cir.2011Background
- Standiferds filed a Chapter 13 petition on December 28, 2000 and proposed a plan to pay 100% of unsecured claims from post-petition income and other sources.
- The confirmed plan required monthly operating reports if they operated a business and timely filing of all tax returns with the trustee.
- They formed S & S Joint Venture and failed to file monthly operating reports or share tax returns with the trustee despite income from S & S.
- Trustee moved to dismiss; Standiferds were allowed to modify the plan but the confirmation order’s reporting requirements persisted.
- In 2006 they voluntarily converted to Chapter 7; unsecured debt increased substantially during Chapter 13.
- Trustee sought to deny discharge under § 727(a)(2)(B) and (a)(6)(A); bankruptcy court denied, district court affirmed, and on appeal the issue was whether pre-conversion disobedience can support denial under § 727(a)(6)(A) after conversion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is a Chapter 13 confirmation order a lawful order of the court for §727(a)(6)(A)? | Standiferds: confirmation order not a lawful order;§727(a)(6)(A) does not apply. | Trustee: confirmation order is a lawful court order enforcing reporting duties. | Yes; the confirmation order is a lawful order of the court. |
| Can pre-conversion misconduct support denial of discharge under §727(a)(6)(A) after conversion to Chapter 7? | Standiferds: conduct before conversion cannot support §727(a)(6)(A) in the post-conversion case. | Trustee: conduct during Chapter 13 can support denial under §727(a)(6)(A) after conversion. | Yes; pre-conversion misconduct may support denial under §727(a)(6)(A) after conversion. |
| How does §348 affect whether the case includes pre- and post-conversion proceedings for purposes of §727(a)(6)(A)? | Standiferds: post-conversion only; pre-conversion should be excluded. | Standiferds: conversion creates two phases; post-conversion only matters. | The case includes both pre- and post-conversion proceedings; §348(a) governs, so misconduct during the pre-conversion phase can matter. |
Key Cases Cited
- Marrama v. Citizens Bank of Mass., 549 U.S. 365 (U.S. 2007) (fresh start for honest but unfortunate debtors; overarching principle)
- Grogan v. Garner, 498 U.S. 279 (U.S. 1991) (discharge eligibility and standard for denial)
- In re Talbot, 124 F.3d 1201 (10th Cir. 1997) (finality of confirmation order; rights and liabilities under plan)
- In re Duncan, 329 F.3d 1195 (10th Cir. 2003) (interpretation of discharge and debtor duties)
- In re Langholf, 37 B.R. 414 (Bankr.N.D. Ill. 1984) (post-conversion conduct and discharge considerations)
- In re Yates, 429 B.R. 675 (Bankr.E.D. Mo. 2010) (denial of discharge after conversion based on pre/post conversion conduct)
- In re Powers, 112 B.R. 184 (Bankr.S.D. Tex. 1989) (pre- and post-conversion conduct and discharge)