641 F.3d 559
1st Cir.2011Background
- Thunberg filed a Chapter 7 petition in Aug 2000; Wallick appointed trustee.
- Discharge issued in Dec 2000; in Apr 2002 trustee sought revocation for fraud.
- Bankruptcy court revoked discharge in Aug 2009; district court affirmed.
- Settlement from 1997 divorce provided annual payments including alimony and property settlement portions.
- Thunberg allegedly misrepresented liens and accelerated payments; some payments were not properly disclosed to the estate.
- Court held that revocation of discharge was warranted based on fraudulent conduct and omissions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the discharge revocation was proper due to fraud and nondisclosure | Thunberg maintained actions were honest mistakes | Trustee proved deliberate concealment and misrepresentation | Affirm discharge revocation |
| Whether misreporting of payments and liens supported revocation | No intentional concealment; misstatements were inadvertent | Pattern of evasion and concealment supports revocation | Yes, supports revocation |
| Whether accelerated payments affected the estate reporting | Accelerations were not adequately disclosed | Accelerations were not material to the estate | Accelerations contributed to misconduct |
| Whether the district court applied the correct standard for revocation | Standard misapplied as discharge-denial | Standard properly applied to revocation | Standard properly applied |
Key Cases Cited
- In re Tully, Boroff v. Tully, 818 F.2d 106 (1st Cir. 1987) (fraud-based revocation standard)
- Olsen v. Reese (In re Reese), 203 B.R. 425 (Bankr.N.D.Ill.1997) (evasion and omissions can support revocation)
- Gannett v. Carp (In re Carp), 340 F.3d 15 (1st Cir. 2003) (clear error standard for factual findings)