Angell, Trustee v. Byrd

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NORTH CAROLINA
WILMINGTON DIVISION
IN RE: CASE NO.
DAVID WINSTON BYRD JR. 04-09427-8-JRL
DEBTOR
JAMES B. ANGELL, ADVERSARY PROCEEDING NO.
Chapter 7 Trustee for
David Winston Byrd Jr., L-05-00314-8-AP
PLAINTIFF
v.
DAVID WINSTON BYRD JR.,
DEFENDANT.
MEMORANDUM OPINION
The trial of this adversary proceeding brought by James B.
Angell, chapter 7 trustee in the case of David Winston Byrd Jr.,
to deny the debtor’s discharge pursuant to 11 U.S.C. § 727(a),
was held in Wilmington, North Carolina on February 20, 2007.
This bankruptcy court has jurisdiction over the parties and
the subject matter of this proceeding pursuant to 28 U.S.C. §§
SO ORDERED.
SIGNED this 26 day of February, 2007.
________________________________________
A. Thomas Small
United States Bankruptcy Judge
____________________________________________________________
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151, 157, and 1334, and the General Order of Reference entered
by the United States District Court for the Eastern District of
North Carolina on August 3, 1984. This is a "core proceeding"
within the meaning of 28 U.S.C. § 157(b)(2)(J), which this court
may hear and determine.
Mr. Byrd filed a petition for relief under chapter 11 of the
Bankruptcy Code on December 16, 2004. On May 19, 2005, an order
was entered by this court converting the chapter 11 case to
chapter 7, and James B. Angell was appointed trustee. On
January 8, 2007, the court entered an order allowing Mr. Byrd’s
attorney to withdraw as counsel. At the time of this trial, Mr.
Byrd had not retained substitute counsel.
The trustee requests that Mr. Byrd’s discharge be denied for
failure to provide sufficient financial documents and
information. At Mr. Byrd’s 341 examination the trustee requested
that Mr. Byrd provide the trustee with certain documents and
records, including the following:
a. The books and records, including financial statements,
ledgers, bank statements, check registers, and
cancelled checks, for any business with which the
debtor was involved during the three years prior to
the filing of the bankruptcy petition;
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b. The debtor’s personal financial information, including
all bank statements and financial statements;
c. All contracts and appraisals for all real property in
which the debtor held an interest during the three
years prior to the filing of the bankruptcy petition;
and
d. Federal and state tax returns of the debtor for the
three years prior to the filing of the bankruptcy
petition.
Mr. Byrd admitted in his answer that he was asked to provide
the above documents to the trustee, and that he did not provide
the requested documents or information to the trustee. Mr. Byrd
did not appear at the trial to explain his failure to provide
the requested documents.
Section 727(a) sets forth the exceptions to discharge
applicable to a chapter 7 case. Section 727(a)(3) disallows the
granting of a discharge where
the debtor has concealed, destroyed, mutilated,
falsified, or failed to keep or preserve any recorded
information, including books, documents, records, and
papers, from which the debtor’s financial condition or
business transactions might be ascertained, unless
such act or failure to act was justified under all the
circumstances of the case[.]
11 U.S.C. § 727(a)(3). Section 727(a)(3) requires a debtor to
keep records in order to provide the trustee and "creditors
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sufficient information from which they can assess the debtor’s
estate and general financial posture." In re Farouki, 133 B.R.
769, 781 (Bankr. E.D. Va. 1991). The court has discretion to
determine whether the records produced by the debtor satisfy the
statutory requirements of § 727(a)(3). Farouki, 133 B.R. at
781.
In this case, the trustee requested that Mr. Byrd provide
specific financial documents and information to which the
trustee was entitled. The debtor had ample opportunity to
produce the requested documents, but he failed to comply with
the trustee’s request, and offered no explanation for his
failure to comply. Accordingly, the court finds that the debtor
failed to produce any records or documents from which his
financial condition might be ascertained, and he failed to
justify why those items were not produced. Because the debtor
did not provide sufficient financial records as required by §
727(a)(3), he is not entitled to a discharge.
Based on the foregoing, the debtor’s discharge is DENIED
pursuant to 11 U.S.C. § 727(a)(3). A separate judgment will be
entered accordingly.
END OF DOCUMENT
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