2014 Chief Judge Burns - Opinions

Chief Judge Gloria Burns -- Opinions signed in 2014

In re Hickman, Case 11-39943 1/31/2014

Plaintiffs, former LLC members, sought to have the debt owed to them by Debtor, co-member of the LLC, deemed non-dischargeable pursuant to § 523(a)(4) for fraud or defalcation while acting in a fiduciary capacity or in the alternative, embezzlement or larceny. In addition, Plaintiffs requested the Court deny Debtor a discharge under §§ 727(a)(4) and 727(a)(5) for failure to disclose assets to the Court or explain the loss of assets sufficiently. Plaintiffs alleged that Debtor’s practice of reimbursing himself for the LLC’s expenses amounted to fraud or embezzlement. The Court found that the Plaintiffs acceptance of the Debtor’s practices was a basis to deny their general claims. However, the Court did find two instances in which the Debtor intentionally appropriated funds of the LLC for his personal benefit. First, when he sold the company his own piece of property for significantly more than it was worth. Second, when he reimbursed himself without permission for an alleged loan given to the company that he failed to properly document, at a time when the LLC was in financial trouble.  The Court found the Debtor liable for $51,250 as a result of these two transfers. The Court did not find that there was sufficient evidence to substantiate Plaintiffs’ remaining claims.

 


 

In re Stacy Allen, Case 13-14348 3/26/2014

Debtor Stacy Allen objects to the Proof of Claim filed by Advanced Telecommunication Network, Inc. The Court found that the Proof of Claim should be allowed in part due to the Debtor’s status as a subsequent transferee of a fraudulently transferred settlement funds originally distributed to her husband. A claim in the amount of $2,399,805.39 was entered.