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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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I have a bankrupcy debtor who has hidden all of his assets

Customer Question

I have a bankrupcy debtor who has hidden all of his assets and cash in a corporation he did not disclose in TWO filings.

I am looking for the proper forms and statutes to have him kicked out of BK court. The trustee was pretty useless, even though I brought the fraud to his attention before the creditors meeting. The trustee has already signed off on this as a "no asset" case, despite having no information about this corporation with the individual as the sole shareholder, and officer of the corporation.

I am only owed 10K, and I know there is at least this much in this corporation. Why would the Trustee sign off on a "no asset" Chapter 7 without considering this very obvious hiding of assets and cash? I feel like the trustee just rammed this through the system, but now I have a formal objection.
Submitted: 4 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 4 years ago.

Hi JACustomer,

Did you attend the trustee meeting?

Have you brought the hidden assets to the trustee's attention?

Customer: replied 4 years ago.
Yes and yes.. He wrote me a lengthy letter stating that the corporation was not part of the BK, which is nonsense since the shares of it are held entirely by the debtor, and his only source of income.
Expert:  cfortunato replied 4 years ago.

What is the market value of the corporation - how much could it be sold for? (Keep in mind that no matter how much money the corporation makes, it cannot be sold if it cannot run without the current owner.)

Customer: replied 4 years ago.
We have no idea because no information was disclosed in the petition. This is why I don't understand how the trustee could sign off already. This was fraud.
Expert:  cfortunato replied 4 years ago.

If you think the corporation could have been sold and/or there was fraud involved, and if the Bankruptcy trustee will not address this, the next step is to report this to the US Trustee. The US Trustee supervises the Bankruptcy trustees.

You should be able to find his or her name and address on the Notice of Chapter 7 Bankrutpcy Filing you should have received when the case was filed. If you cannot find that information, you can get it by calling the clerk at the Bankruptcy court.

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