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What happens if a debtor in possession (in a chapter 11) is…

what happens if a debtor...
what happens if a debtor in possession (in a chapter 11) is found to have his paycheck getting deposited into his wife's bank account and then there are large transfers of money from the spouse bank account into other bank accounts? Can the spouse be brought into the bankruptcy or be found guilty of bankruptcy fraud?in this situation the DIP also appears to be making counter credits into these bank accounts with money that has not traceability as the debtor already filed schedules which said they had no other money or assets except their paycheck
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Answered in 3 hours by:
7/30/2017
NYCLAWYER
NYCLAWYER, Attorney
Category: Bankruptcy Law
Satisfied Customers: 63,031
Experience: LICENSED NY AND NJ BUSINESS LAWYER
Verified
Greetings! I am a legal expert on the site and am working on your question.The trustee and the court can void the transfers and bring those assets into the estate. If needed, the recipients of the funds would need to appear and account.
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Customer reply replied 11 months ago
In the same case, the debtor is filing operating reports which show some banking info (which is why us creditors see these wire transfers into the spouse account, along with very large $20K cash withdrawals out of the same accounts) but it does not show any proof of payments being made to ANY lawyers.The debtor has litigation going on in bankruptcy court (two lawyers representing him) and another two lawyers representing him in litigation outside of the bk case....yet the operating reports do not show any trace of any checks being written to cover these expenses. Even the lawyers the debtor has on record for his bk case are showing filing periodic compensation disclosure forms but there is no banking activity from the debtor to match up with even these payments his lawyers say he has made to them...and then the other two lawyers have not even filed any compensation disclosure form...How can this be stopped immediately and how can the creditors (through the creditor committee) find out where this extra cash is coming from??
The trustee and committee are entitled to an accounting and careful review of bank statements for the debtor.
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Court could hold debtor in contempt for lying or withholding information.
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Please let me know if that is acceptable and feel free to reply back and follow up
NYCLAWYER
NYCLAWYER, Attorney
Category: Bankruptcy Law
Satisfied Customers: 63,031
Experience: LICENSED NY AND NJ BUSINESS LAWYER
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