David James Truscott

UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re:
David James Truscott,
Debtor/Debtor-In-Possession.
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Case No. 25-30378
Chapter 11
Judge Crist
ORDER OVERRULING OBJECTIONS OF CREDITOR JONATHAN D.
KRACHENFELS TO DISCLOSURE STATEMENT EXCEPT TO REQUIRE
ADDITIONAL DISCLOSURE WITH RESPECT TO DEBTOR’S WHOLLY OWNED
BUSINESS THAT IS HIS SOLE SOURCE OF INCOME, FIXING DEADLINE TO
FILE AN AMENDED CHAPTER 11 PLAN OF REORGANIZATION AND
DISCLOSURE STATEMENT (DOCS. 132 and 133), AND ORDERING
OTHER MATTERS
This matter is before the Court on the Disclosure Statement with Respect to Plan of
Reorganization of David Truscott (Doc. 133) (the “Disclosure Statement”), filed pursuant to 11
U.S.C. § 1125 and Rule 3016(b) of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy
Rules”), which relates to the Plan of Reorganization of Debtor David Truscott Dated February
23, 2026 (Doc. 132) (the “Plan”), both filed by Debtor David James Truscott (the “Debtor” and
“Mr. Truscott”) on February 23, 2026, and approval of which was opposed in Creditor Jonathan
D. Krachenfels’ Objections to Debtor’s Disclosure Statement (Doc. 147) filed on April 7, 2026
This document has been electronically entered in the records of the United
States Bankruptcy Court for the Southern District of Ohio.
IT IS SO ORDERED.
Dated: May 4, 2026
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(the “Objection”). Also before the Court was the Reply of Debtor/Debtor-in-Possession to Creditor
Jonathan D. Krachenfels’ Objection to Disclosure Statement (Doc. 147) (Doc. 148), filed on April
14, 2026.
Pursuant to the Order Rescheduling Hearing on Approval of Disclosure Statement (Doc.
133) to April 22, 2026 at 10:00 A.M. (Eastern Prevailing Time) (Doc. 142) entered on March 10,
2026, the Court conducted a hearing on April 22, 2026 at 10:00 a.m. to determine the adequacy of
the Debtor’s Disclosure Statement, pursuant to Bankruptcy Rule 3017, in accordance with the
previously issued Order Setting Hearing to Consider Approval of Disclosure Statement (Doc.
133), and Notice Thereof (Doc. 137). The hearing was held in person and in attendance were Denis
E. Blasius and Elizabeth M. Chinault, Counsel for the Debtor; the Debtor Mr. Truscott; and James
P. Connors, Counsel for Creditor Jonathan D. Krachenfels (“Mr. Krachenfels”). Nathan A.
Wheatley, Counsel for the United States Trustee, appeared telephonically. The Debtor identified
his Plan and Disclosure Statement as exhibits for the hearing and himself as the sole witness. See
Ex. List of Debtor David Truscott on Approval of Discl. Statement (Doc. 149); Witness List of
Debtor David Truscott on Approval of Discl. Statement (Doc. 150). Counsel for Mr. Krachenfels
did not file exhibit or witness lists, and he did not seek to introduce any evidence at the hearing,
instead opting to solely make argument to the Court, largely consistent with the previously filed
Objection. The United States Trustee does not oppose approval of the Disclosure Statement for
purposes of solicitation of acceptance or rejection of the Plan.
Based upon the Court’s colloquy with counsel for the parties, and after considering the
objections argued by counsel for Mr. Krachenfels, the Court indicated that it was tentatively
disposed to approve the Disclosure Statement; however, the Court determined that it would
conduct another review of the Disclosure Statement in light of the fact that Debtor indicated he
would be further amending the Plan, in the event there are any matters the Court would determine
the Debtor should expound upon in the course of making such amendments. Further, in light of
the forthcoming amendment of the Plan, counsel for the Debtor did not wish to set the deadlines
for the holders of claims to accept or reject the Plan and for a confirmation hearing, which are
required by Bankruptcy Rule 3017(c) and must be set “[a]t the time or before the disclosure
statement is approved[.]” In essence, the process is paused to allow the Debtor to amend the
Disclosure Statement and Plan, as well as for the Court to review the amended versions prior to
approval and set the deadlines required by Bankruptcy Rule 3017(c) and (d).
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In the meantime, the Court has further reviewed the Disclosure Statement and finds that
there is a category of information that should be bolstered in order to provide “adequate
information,” as that term is defined in 11 U.S.C. § 1125(a)(1). In particular, the Debtor should
expound upon and include historical and future financial projections for Finishing Touches
Flooring Specialists, LLC dba DACO (“DACO”), of which Debtor is sole owner and, in turn, is
identified in the Disclosure Statement as the “Debtor’s sole source of income.” Discl. Statement
at 17-18. Debtor discloses that he “has recently been receiving distributions from DACO of
approximately $11,000.00 per month[,]” which begs the question of what he has historically
received in distributions and what the basis is for the distributions he will receive during the course
of his proposed Plan. Because the feasibility of Debtor’s Plan, which is a requirement of
confirmation under 11 U.S.C. § 1129(a)(11), is wholly dependent upon his continued receipt of
income from his wholly-owned business, DACO, which he mentions might also be subject to the
judgment that is currently on appeal, at least according to Mr. Krachenfels, it is reasonable to
require projections for the continued operations of DACO covering the same period of time for
which the Debtor has provided, to date, only his personal budget projections, as set forth in Exhibit
B to the Disclosure Statement, as well as some modest period of historical income derived from
DACO. Moreover, in the liquidation analysis included within the Disclosure Statement (see pages
32-35), the Debtor identifies Finishing Touches Flooring Specialists LLC as having no value, yet
this entity will be paying for what appears to be Debtor’s vehicle and will be furnishing his
personal top-line “net income” identified in the projections attached as Exhibit “B” to his current
Disclosure Statement. Accordingly, more information about DACO is needed as its success or
failure will apparently be the Debtor’s success or failure under the proposed Plan. See In re
Microwave Prods. of Am., Inc., 100 B.R. 376, 377 (Bankr. W.D. Tenn. 1989) (quoting In re Stanley
Hotel, Inc., 13 B.R. 926 (Bankr. D. Colo. 1981)).
Otherwise, the Court notes that the United States Trustee has no opposition to approval of
the Disclosure Statement, Mr. Krachenfels’ objections to approval of the Disclosure Statement are
either not well-taken or are in the nature of objections that he may assert in opposition to
confirmation of an amended plan of reorganization,1 and the Court finds that the Disclosure
Statement for the Plan contains “adequate information” as defined in 11 U.S.C. § 1125(a)(1) and
1 At this time, it does not appear that the proposed Plan is “patently unconfirmable” as the Debtor is proposing to
provide “new value” in order to retain his non-exempt assets.
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as analyzed under the factors set forth in applicable case law. See, e.g., In re Cardinal Congregate
I, 121 B.R. 760, 764 (Bankr. S.D. Ohio 1990) (observing that “Congress left vague the standard
for evaluating what constitutes adequate information so as to permit a case-by-case determination
based on the prevailing facts and circumstances” (citing H.R. Rep. No. 595, 95th Cong., 1st Sess.
225, 409 (1977); S. Rep. No. 989, 95th Cong. 2d Sess. 121 (1978), U.S. Code Cong. & Admin.
News 5787) and listing nineteen (19) non-exhaustive categories of information that may need to
be disclosed, depending on the facts and circumstances of each case. Id. at 765 (quoting In re
Scioto Valley Mort. Co., 88 B.R. 168, 170-71 (Bankr. S.D. Ohio 1988)).
Fundamentally, to date, this chapter 11 case has largely been the continuation of a dispute
between the Debtor and Mr. Krachenfels, who has been very active in this case.2 Mr. Krachenfels
has been heard on several objections during the course of this case. Mr. Krachenfels appears to be
well-informed of the status of this case and the Debtor’s proposed Plan and Disclosure Statement,
to which he asserted a number of objections. And Mr. Krachenfels’ counsel in this bankruptcy case
is also representing him in the appeal pending in the Court of Appeals, Second Appellate District,
Montgomery County, Case No. CA 30349, such that he should be fully informed of the status of
the appeal, which is the main contingency that will drive the ultimate recovery to creditors under
the proposed Plan, in the event that the Plan is confirmed. Thus, Mr. Krachenfels may have as
good, or even better, an understanding than other creditors of how this might ultimately play out,
and none of the other creditors objected to approval of the Disclosure Statement.
Accordingly, for the reasons stated on the record at the hearing on April 22, 2026, and for
the reasons set forth herein, it is hereby ORDERED that:
1. 	Except insofar as the Court is hereby ordering the Debtor to include further
information and projections with respect to DACO, as set forth in the findings above, the
Objection asserted by Creditor Jonathan D. Krachenfels is hereby OVERRULED, and the
Court finds and determines that the Disclosure Statement otherwise includes “adequate
information” as that term is defined in 11 U.S.C. § 1125(a)(1).
2 In fact, as set forth in the Disclosure Statement, the impaired classes of claims ultimately boil down to the secured
claim of the Montgomery County Treasurer for past due real estate taxes on 2441 Catalpa Drive, Dayton, Ohio 45406,
which was ordered to be transferred to Mr. Krachenfels prepetition, the secured and unsecured claims of Mr.
Krachenfels regarding his $3.111 million default judgment, non-disputed general unsecured claims of $9,210.52, and
penalty claims estimated to be $8,450.51, such that all other impaired claims are dwarfed by Mr. Krachenfels’ claim
which is presently on appeal.
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2. 	The Debtor shall have until and including Friday, May 22, 2026 to file an
amended chapter 11 plan of reorganization and an amended disclosure statement that
addresses the items set forth above, along with the amendments to the Plan that the Debtor
intends to make.
3. 	Upon receipt of the amended plan of reorganization and disclosure
statement, the Court will determine how to proceed, but presently anticipates that so long
as the amended disclosure statement addresses the issue raised herein concerning the need
for projections regarding Debtor’s sole source of income from DACO, and presuming that
the amended disclosure statement otherwise continues to include the same information as
the current Disclosure Statement, which the Courts finds to otherwise contain “adequate
information,” as defined in 11 U.S.C. § 1125(a)(1), and adequately discloses any
substantive amendments to the Plan, the Court will issue a final order on the adequacy of
the information in accordance with § 1125(b) and Bankruptcy Rule 3017(b) and, in the
event the amended disclosure statement is approved, set the deadlines required under
Bankruptcy Rule 3017(c) and (d) for acceptance or rejection of the amended plan, for
objections to confirmation of the amended plan, and for the confirmation hearing.3
4. 	At this time, given that a notice and hearing has already been held pursuant
to Bankruptcy Rule 3017(a)(1), and being cognizant of not increasing the costs in this case
relating to approval of the Disclosure Statement,4 the Court does not intend to schedule a
further hearing on approval of the forthcoming amended disclosure statement, presuming
that the Court’s concerns are adequately addressed. See, e.g., In re Cardinal Congregate I,
121 B.R. at 768 (concluding that if the amended Disclosure Statement, amended to
“accommodate the Court’s concerns” is “adequate” then “no further hearings will be
necessary.”).
5. 	When Debtor files his amended disclosure statement, he shall file the “form
of the ballot clearly marked ‘draft’ to be circulated for acceptance or rejection of the plan.”
3 As noted at the hearing, the Court may circulate a proposed schedule to counsel for the Debtor and Mr. Krachenfels
in order to ensure the parties’ availability.
4 “Congress intended that the courts should consider as part of their determination the cost of preparing a more detailed
disclosure statement . . . .” In re Cardinal Congregate I, 121 B.R. at 764.
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LBR 3018-2. And “[t]he ballot shall contain the address of the plan proponent and shall
specify that the original of the completed ballot is to be returned to the attorney for the plan
proponent.” Id.
IT IS SO ORDERED.
Copies to:
Default List Plus Top 20
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