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The Security National Bank of Sioux City, IA v. Vera T. Welte Testamentary Trust

Summarizing by Amir Shachmurove


Case Type:
Case Status:
Reversed and Remanded
WW-17-1226-TaSKu (9th Circuit, Jun 05,2018) Published
9th Cir. BAP held that a bankruptcy court has authority under § 105(a) and Rule 2004 to compel a debtor to sign a "Consent Directive" which directs foreign banks and financial institutions that receive the Consent Directive to disclose any accounts held by the debtor. The bankruptcy court's authority is based upon the debtor’s § 521(a)(4) obligation to provide recorded information to the trustee and the trustee’s § 704 duties to investigate a debtor’s affairs.
Procedural context:
The bankruptcy court denied the Trustee's request to compel a debtor to sign a consent directive, finding that a consent directive was a form of injunctive relief not authorized under Rule 2004. Because a Rule 2004 examination decision may be interlocutory, the BAP granted leave to appeal under 28 U.S.C. § 158(a)(3). The BAP reversed the bankruptcy court, and remanded for the bankruptcy court to consider whether the court should exercise its discretion to issue the consent directive.
Debtor was an uncooperative involuntary debtor that had "fled" with his wife to France with estate assets. Their legal troubles include pending criminal charges. See generally Mastro v. Rigby, 764 F.3d 1090, 1092 (9th Cir. 2014) (“[A] French Court of Appeal has denied U.S. requests to extradite [the debtor and his wife]”). The Trustee was confident that estate assets outside his control exist.
TAYLOR, SPRAKER, and KURTZ, Bankruptcy Judges

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