Phillips v. Epic Aviation (In re Phillips)

Summarized by Jeffrey Snyder , Bilzin Sumberg Baena Price & Axelrod, LLP
13 years 11 months ago

Citation:

11-11916 (11th Cir. Apr. 2, 2012) (unpublished)

Tag(s):

Ruling:

1. Denial of discharge under section 727(a)(4) affirmed where bankruptcy court found actual intent to defraud on the part of the debtor, thereby applying correct standard. Fact that transfer of real estate interest omitted from Statement of Financial Affairs ("SOFA") was "undocumented" does not exempt debtor from listing it in response to question 10 of Statement of Financials where transaction was not in ordinary course of debtor's business. Bankruptcy court's finding that debtor knowingly and fraudulently disregarded his disclosure obligation was not clearly erroneous notwithstanding debtor's claims that he (a) did not know he held an interest that required disclosure on SOFA and (b) gave unspecified information regarding transaction to trustee prior to 341 meeting. 2. Bankruptcy court's finding that five payments to attorneys were outside ordinary course of debtor's financial affairs, should have been disclosed in SOFA, and were knowingly and intentionally omitted was not clearly erroneous where several of which related to the separate bankruptcy of a company owned by the debtor and debtor did disclose a payment to another attorney. 3. Bankruptcy court's finding that debtor acted knowingly and fraudulently in omission of debtor's interest in $3,090 security deposit was not clearly erroneous based on totality of conduct in respect to disclosure obligations and shifting testimony. Debtor's claim that omission was immaterial was rejected because an omission is material if "it bears a relationship to the bankrupt’s business transactions or estate, or concerns the discovery of assets, business dealings, or the existence and disposition of his property" even if no creditor is injured and omitted asset is worthless.

Procedural context:

Appeal of district court's order affirming bankruptcy court's final judgment denying debtor's discharge under section 727(a)(4)(A) for making false oaths in connection with schedules and statement of financial affairs.

Facts:

Debtor failed to disclose "undocumented" transfer of real estate interest, payments to attorneys, and interest in security deposit on Statement of Financial Affairs despite (i) transactions having occurred in four months prior to filing bankruptcy and one month prior to attorney began preparing schedules, and (ii) debtor being “sophisticated, educated businessperson,” who was the principal of numerous corporate entities, and has “owned and invested in several multimillion-dollar jet planes.”

Judge(s):

TJOFLAT, EDMONDSON and MARCUS

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