- Case Type:
- Case Status:
- CC-17-1092-FSKu and CC-17-1303-FSKu (consolidated) (9th Circuit, Aug 06,2018) Not Published
- Ninth Circuit BAP affirmed the judgment of bankruptcy court finding community property held by debtor and non-filing spouse, which included the assets of an out-of-state alter-ego corporation, were part of the bankruptcy estate and were subject to turnover under § 542(a) “wherever located.” Debtor’s schedules from prior bankruptcies were “testimony” and could be used in evaluating which assets were part of the estate.
- Procedural context:
- Appeal to the Ninth Circuit Bankruptcy Appellate Panel from judgment of bankruptcy court (C. D. California).
- Before the present case, Chapter 7 debtor filed bankruptcy four times from 2009 to 2012. Debtor represented in these bankruptcies she had one-half ownership interest in two companies including Dwarfco. She valued her interested at $4 million in 2009 and $2.5 million in 2012. She also listed paintings, jewelry, and gemstones valued at about $90,000. Her fifth bankruptcy was converted from a Chapter 11 to a Chapter 7. Trustee filed schedules on behalf of the debtor based on the information from previous cases. Debtor’s non-filing spouse, Mr. Taxe, was examined under Rule 2004 and testified he owed a valuable Kandinsky painting in addition to gemstones and diamonds. Trustee commenced an adversary proceeding seeking turnover of various assets under § 542(a) alleging Mr. Taxe’s interest was shared with the debtor as community property. After a trial, the bankruptcy court found Dwarfco was a sham corporation, and that the gemstones, a deed of trust, and the Kandinsky painting were part of the bankruptcy estate. Parties appealed to BAP.
- FARIS, SPRAKER, and KURTZ
Nakhuda v. Shalaby (In re: Nakhuda)
Summarizing by Lars Fuller
2859 in the system
14 Being Processed