Edmondson v. Gordon (In re Gordon)

Case Type:
Case Status:
Affirmed in part and Reversed in part
12-09605 (6th Circuit, May 18,2017) Not Published
The Sixth Circuit Bankruptcy Appellate Panel affirmed the Bankruptcy Court's contempt finding and remanded for determination of amount of sanctions to be awarded. The Panel affirmed the Bankruptcy Court's holding that appellant was in contempt. However, the Bankruptcy Court's order to show only provided notice that appellant faced sanctions if he refused to appear as required by the order; this was insufficient to provide notice that appellant faced sanctions if he did appear. The Panel also found insufficient notice and opportunity to respond to the amount of sanctions.
Procedural context:
At a contempt show cause hearing, the Bankruptcy Court found the appellant in contempt of court for (i) disobeying a court order requiring that property be turned over the Chapter 7 Trustee, (ii) selling the property, and (iii) retaining at least some of the proceeds of the property in violation of a second court order. The appellant appealed the contempt order.
Two properties were transferred from the debtor to an irrevocable trust within two months before the petition for no value. The Chapter 7 Trustee sued the trustee of the debtor's trust - the debtor's son ('appellant") - to avoid the transfers. At an expedited hearing for summary judgment, the Bankruptcy Court granted summary judgment in favor the Chapter 7 Trustee and ordered the appellant to immediately turn over the property to the Trustee. Appellant subsequently sold one of the two properties without notice to the Trustee. The Trustee obtained an order from the Bankruptcy Court for immediate transfer of all proceeds from the sale, and an order to show cause why the appellant should not be held in contempt of court.

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