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Summarizing by Shane Ramsey

Mayor, et al. v. Wolkowitz (In re Cinevision International, Inc.)

9th Cir BAP No. CC-15-1227-FCTa (Feb. 17, 2016) (unpublished)
Bankruptcy court properly awarded Chapter 7 Trustee sanctions of $99,745.24 against principals of Debtor corporation under Section 105(a) and 542 for violating the stay and refusing to turnover property of the estate.
Procedural context:
At the request of the Chapter 7 Trustee, the bankruptcy the court issued an OSC requiring the principals of the Debtor “to file a written explanation, if any, why they should not be held in civil contempt for their knowing violation of the automatic stay and turnover obligations (11 U.S.C.§ 105(a) and 11 USC § 542(a)).” The bankruptcy court had previously entered partial summary judgment in favor of the Trustee on an adversary proceeding for turnover of property. Over opposition, the bankruptcy court awarded sanctions. On appeal, the BAP affirmed the bankruptcy court's order.
A married couple, one of whom was an attorney, owned and operated a corporation. Prior to the corporation filing a Chapter 11 petition, the husband formed a new corporation. After the case was converted to Chapter 7, the bankruptcy court determined that the new corporation held certain assets belonging to the Debtor corporation, and the principals had refused to turnover such assets to the Chapter 7 trustee.

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