Cook v. Bolger

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
1
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re
MASON and JEWEL COOK, 	No. 05-12491
Debtor(s).
______________________________________/
MASON COOK,
Plaintiff(s),
v. 	A.P. No. 08-1058
RAY BOLGER,
Defendant(s).
_______________________________________/
Memorandum After Trial
_________________
Defendant Ray Bolger is a truck driver and former employee of Chapter 11 debtor and plaintiff
Mason Cook, who operated a towing business. 	In February of 2005, Cook and Bolger entered into an
agreement whereby Cook would sell the business to Bolger. Pursuant to the agreement, Bolger gave
Cook $30,000.00 as a deposit. 	The sale was up in the air when Cook and his wife filed their Chapter
11 petition on September 13, 2005. Bolger was not scheduled as a creditor.
On October 15, 2005, apparently without the knowledge of bankruptcy counsel, Cook gave
Entered on Docket
November 24, 2009
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 08-01058 Doc# 52 Filed: 11/24/09 Entered: 11/24/09 06:03:35 Page 1 of 4

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
2
Bolger a check for $30,000.00 to return Bolger’s deposit. However, the check did not clear. Ten days
later, on October 25, 2005, Cook gave Bolger a cashier’s check for $5,000.00 an promised to repay the
balance.
In July, 2006, Bolger wanted to purchase a Peterbuilt truck from one Marc Opperman. Bolger
and Opperman and Cook entered into a three-way deal whereby Cook signed a note for $25,000.00 to
Bolger, who used the note as part of his payment to Opperman. Under the three-way deal, not
disclosed or approved by the court, Cook would make his payments to Opperman and Bolger would be
given a security interest in one of Cook’s tow trucks, a 2000 Freightliner.
On December 12, 2007, for reasons not clear, Bolger returned his Peterbuilt truck to
Opperman. A few days later, on December 21, 2007, Bolger helped himself to Cook’s tow truck,
falsely alleging that Cook was delinquent in his payments under the note. Bolger changed title of the
truck to his own name, and it remains in his possession. Bolger had full knowledge of Cook’s
bankruptcy when he took the tow truck. He never complied with any of the provisions of California
law governing motor vehicle repossessions.
Cook’s Chapter 11 plan was confirmed on December 9, 2008. The Chapter 11 case remains
open, and he and his wife remain (for now) debtors in possession.
It is of course difficult to do justice when neither of the parties before the court is entitle to
justice. Bolger is guilty of willful violation of the automatic stay for taking the vehicle without
obtaining bankruptcy court permission. Since the repossession was pursuant to a security interest in an
estate asset granted postpetition and without court order to secure a prepetition debt, it was also an
unauthorized postpetition transfer avoidable pursuant to § 549(a) of the Bankruptcy Code, as was the
$5,000.00 cash payment. He is also very probably subject to prosecution pursuant to 18 U.S.C. §
152(5) by knowingly and fraudulently receiving property from a bankruptcy estate.
Of the two, Cook is by far the bigger wrongdoer. He played fast and loose with the bankruptcy
laws he invoked by filing a Chapter 11 petition. He failed to schedule his debt to Bolger. He
hypothecated estate property without court permission and failed to disclose his conduct in his
Case: 08-01058 Doc# 52 Filed: 11/24/09 Entered: 11/24/09 06:03:35 Page 2 of 4

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
3
disclosure statement. His conduct clearly subjects him to prosecution pursuant to 18 U.S.C. 11 § 153
for embezzlement. He is certainly not fit to be a debtor in possession.
For the foregoing reasons, judgment will be entered against Bolger as follows:
1. Damages for conversion of estate assets in the amount of $30,000.00, plus interest at the
federal legal rate from and after October 25, 2005 as to $5,000.00 and from and after December 21,
2007, as to $25,000.00.
2. Punitive damages in the sum of $50,000.00.
3. Attorneys’ fees and costs of suit.
Provided, however, that judgment will be entered in favor of the bankruptcy estate, not Cook
personally. All sums recovered, after payment of attorneys’ fees, shall be distributed to creditors
holding allowed claims.
This memorandum constitutes the court’s findings and conclusions pursuant to FRCP 52(a) and
FRBP 7052. Counsel for Cook shall submit an appropriate form of judgment forthwith.
Dated: November 23, 2009
SAlan Jaroslovsky
U.S. Bankruptcy Judge
Case: 08-01058 Doc# 52 Filed: 11/24/09 Entered: 11/24/09 06:03:35 Page 3 of 4

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re
MASON and JEWEL COOK, 	No. 05-12491
Debtor(s).
______________________________________/
MASON COOK, Plaintiff(s),
v. 	A.P. No. 08-1058
RAY BOLGER, Defendant(s).
_______________________________________/
CERTIFICATE OF MAILING
The undersigned deputy clerk of the United States Bankruptcy Court for the Northern
District of California hereby certifies that a copy of the related document was mailed to all parties
listed below as required by the Bankruptcy Code and Rules of Bankruptcy Procedure.
Dated: November 24, 2009 	V. Jump
Deputy Clerk
Raymond Bolger
P.O. Box 1313
Calistoga, CA 95415
Case: 08-01058 Doc# 52 Filed: 11/24/09 Entered: 11/24/09 06:03:35 Page 4 of 4