Richard Davis

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
)
IN RE )
)
RICHARD DAVIS, ) CASE NO. 07-33986-H3-7
)
Debtor, )
)
MEMORANDUM OPINION
The court has considered the "Emergency Motion to
Compel Production of Documents and Motion for Costs" (Docket No.
43) filed by the Chapter 7 Trustee in the above captioned case.
The following are the Findings of Fact and Conclusions of Law of
the court. A separate conforming Judgment will be entered. To
the extent any of the Findings of Fact are considered Conclusions
of Law, they are adopted as such. To the extent any of the
Conclusions of Law are considered Findings of Fact, they are
adopted as such.
Findings of Fact
Richard Davis ("Debtor") filed a voluntary petition
under Chapter 7 of the Bankruptcy Code on June 12, 2007. William
G. West is the Chapter 7 Trustee. Debtor's counsel of record in
the instant case is Afton Izen.
The instant case was filed eight days after the filing
of Case No. 07-33685-H3-11, styled "Richard D. Davis, Limited
Liability Partnership, a Texas General Partnership" (the
ENTERED
01/24/2008
Case 07-33986 Document 90 Filed in TXSB on 01/24/08 Page 1 of 10

2
"Partnership Case"). The Partnership Case has subsequently been
dismissed.
In the instant case, Debtor listed in his schedule B,
interests in Richard D. Davis LLP, Aircraft Aloft II, LLC, and
R.D. Davis Investments, LP. He listed accounts receivable due
from Aircraft Aloft II, LLC, Skydive Houston, LLC, Parachute
Leasing, LLC, Skylakes Aviation, LLC, and Aircraft Aloft, LLC.
(Docket No. 10).
In Debtor's statement of financial affairs, he listed
as entities in which he was a officer, director, partner, or
managing executive of a corporation, partner in a partnership,
sole proprietor, or self employed in a trade, or in which the
debtor owned 5 percent or more of the voting securities, within
the 6 years prepetition: Zula Air Force 1, Skylakes Aviation,
LLC, Skydive Houston, LLC, Richard D. Davis LLP, R.D. Davis
Investment, R.D. Davis & Assc. LLC, Parachute Leasing Co.,
Aircraft Aloft II, LLC, 13500 Air Express, LLC, Aircraft Aloft,
LLC, Richard D. Davis, Trust (Tax ID 90-6034715), and Richard D.
Davis, Trust (Tax ID 90-6032267). (Docket No. 10).
Debtor listed, in his initial schedule A, a life estate
in real property located at 5530 Cobble Lane, Spring, Texas
77379. (Docket No. 10). Debtor subsequently amended his
schedules to indicate that his interest in the property was an
"equitable interest." (Docket No. 34). Debtor testified at the
Case 07-33986 Document 90 Filed in TXSB on 01/24/08 Page 2 of 10

1This court has made no finding at this time as to whether
Debtor owns any interest in these entities, or whether any of
them may properly be considered "Debtors."
3
hearing on the instant motion that he resides at the property.
Trustee testified that he would like to examine the nature of
Debtor's interest in the property, in order to determine whether
to object to Debtor's exemptions.
On September 13, 2007, Trustee's counsel conducted an
examination of the Debtor under Bankruptcy Rule 2004.
After the Rule 2004 examination, on September 26, 2007,
Trustee requested by letter directed to Debtor's counsel copies
of:
1. all tax returns for 13500 Air Express, LLC,
Richard D. Davis, LLP, R.D. Davis Investments, LP,
Aircraft Aloft II, LLC, Skydive Houston, LLC, Parachute
Leasing, LLC, Skylakes Aviation, LLC, Aircraft Aloft,
LLC, Zula Air Force 1, R.D. Davis and Assoc. LLC,
Parachute Leasing Co., Richard D. Davis, Trust (Tax ID
90-6034715) or its trustee, FMS Company and/or any
other entity in which Mr. Davis has owned an interest
in the 4 years prior to the petition date
(collectively, the "Debtor Entities");1
2. all documents, contracts, agreements, invoices
statements, correspondence, and/or emails relating in
any way to the property located at 5530 Cobble, Spring,
Texas 77379;
3. all documents, contracts, agreements, invoices
statements, correspondence, and/or emails relating in
any way to real property owned, held or controlled by
any of the Debtor Entities in the previous 4 years;
4. all documents, contracts, agreements, invoices
statements, correspondence, and/or emails evidencing
Patricia K. Suarez' ownership interest in Richard D.
Davis, LLP, the 50.354 acres of real property in Waller
County, Texas currently used as an airport, and/or any
Case 07-33986 Document 90 Filed in TXSB on 01/24/08 Page 3 of 10

2Trustee's assertion forms the basis of an adversary
proceeding. In Adv. No. 07-3496, the Trustee has sought, inter
alia, turnover of property located in Waller County. The court
has previously entered a temporary restraining order in Adv. No.
07-3496, and a preliminary injunction hearing remains set
December 17, 2007.
4
of the Debtor entities; and
5. all documents, contracts, agreements, invoices
statements, correspondence, and/or emails relating in
any way to assets, including but not limited to
personal property, automobiles, parachutes, accounts
receivable, aircraft and/or equipment, owned and/or
controlled by the Debtor and/or any of the Debtor
entities in the previous 4 years.
(Trustee Exhibit 1).
In the instant motion, Trustee seeks entry of an order
compelling Debtor to fully respond to Trustee's letter of
September 26, 2007. Trustee additionally seeks an award of
$2,225 in costs against Debtor and Debtor's counsel, jointly and
severally. Trustee asserts that Debtor, Debtor's daughter,
Patricia Suarez (herself an attorney), Debtor's attorney, Afton
Izen, James L. Emerson, and JLE Investors, Inc. orchestrated a
postpetition transaction to convey ownership of the 50.534 acre
Waller County airport property out of the estate, without court
authority.2 Trustee asserts that Debtor produced an incomplete
set of documents, responsive to only a limited portion of the
Trustee's request.
The Trustee testified that, on November 5, 2007, he
received a package of documents that reflected the loan
transaction described in Adversary No. 07-3496. He testified
Case 07-33986 Document 90 Filed in TXSB on 01/24/08 Page 4 of 10

5
that that was the first time he became aware of the transaction.
Trustee testified that he has not received the tax
returns for 13500 Air Express, LLC, R.D. Davis Investments, LP,
Skydive Houston, LLC, Parachute Leasing, LLC, Skylakes Aviation,
LLC, Aircraft Aloft, LLC, Zula Air Force 1, R.D. Davis and Assoc.
LLC, Parachute Leasing Co., Richard D. Davis, Trust (Tax ID 90-
6034715) or FMS Company. He testified that he has not received
any documents responsive to items 2-5 listed above.
Debtor testified that he has been indicted on a charge
of tax fraud. He testified that he has posted a cash bond. He
testified that he did not list the posting of the cash bond in
his schedules.
Debtor testified that his daughter's business interests
include Skydive Houston and Richard D. Davis Limited Liability
Partnership.
Debtor testified that he manages Skydive Houston. He
testified that some of the activities of Skydive Houston generate
documents. He testified that he has access to some documents of
Skydive Houston.
Debtor testified that he has a 2% general partnership
interest in Richard D. Davis Limited Liability Partnership. He
testified that he can request access to the documents of Richard
D. Davis Limited Liability Partnership. He testified that
Richard D. Davis Limited Liability Partnership holds title to the
Case 07-33986 Document 90 Filed in TXSB on 01/24/08 Page 5 of 10

3Debtor testified that this entity is the same entity as
Parachute Leasing, LLC.
6
50.354 acre tract in Waller County.
Debtor testified that he has served as an officer of
13500 Air Express, LLC. He testified that, prior to 2006, he was
a general partner.
Debtor testified that he used R.D. Davis Investments,
L.P. as a personal account. He testified that he has access to
its documents.
Debtor testified that, as to Parachute Leasing, LLC,
Skylakes Aviation, LLC, Aircraft Aloft, LLC, Zula Air Force 1,
R.D. Davis & Assoc. LLC, and Parachute Leasing Co.3 are all
partnerships he created.
Debtor testified that Richard D. Davis, Trust (Tax ID
90-6034715), and Richard D. Davis, Trust (Tax ID 90-6032267) are
trusts he created.
Debtor testified that FMS Company was an assumed name
he used. He testified it has never filed separate tax returns.
Debtor testified that he has documents relating to the
Cobble Lane property.
Debtor testified that he believes he has the title
certificates for two vehicles, a 1994 Mercedes and a 1987
Mercedes.
Debtor asserted his privilege against self-
incriminating testimony pursuant to the Fifth Amendment of the
Case 07-33986 Document 90 Filed in TXSB on 01/24/08 Page 6 of 10

7
U.S. Constitution, in response to questions regarding the filing
of tax returns for any of the entities identified, the ownership
by any of the entities of real property, and Debtor's knowledge
regarding the importance of keeping records.
Debtor testified that he believes David Laux, who
worked with him in his tax consulting business, absconded with
several of Debtor's documents. Debtor testified that he has
attempted to provide to Trustee all of the documents to which he
has access or can obtain access.
Debtor testified that he prepared a document, for the
use of his counsel, explaining the documents he believes he is
able to produce, and those he believes he is unable to produce.
Debtor offered the unsigned document at the hearing on the
instant motion. Trustee objected, on grounds the Debtor's
testimony indicated the document was prepared prior to Trustee's
September 26, 2007 letter, and that the document was not sworn.
The court sustained Trustee's objection.
Despite Debtor's testimony that he has or can request
access to the records of Skydive Houston, Richard D. Davis
Limited Liability Partnership, 13500 Air Express, LLC., R.D.
Davis Investments, L.P., Parachute Leasing, LLC, Skylakes
Aviation, LLC, Aircraft Aloft, LLC, Zula Air Force 1, R.D. Davis
& Assoc. LLC, Parachute Leasing Co., Richard D. Davis, Trust (Tax
ID 90-6034715), and Richard D. Davis, Trust (Tax ID 90-6032267),
Case 07-33986 Document 90 Filed in TXSB on 01/24/08 Page 7 of 10

8
and FMS Company, Debtor testified that he has produced all
documents responsive to the Trustee's request in his possession,
custody, or control. This testimony is not credible.
Conclusions of Law
Section 521(a)(3) of the Bankruptcy Code requires that
a debtor in a case in which there is a trustee serving "cooperate
with the trustee as necessary to enable the trustee to perform
the trustee's duties under this title." 11 U.S.C. § 521(a)(3).
Bankruptcy Rule 2004(c) provides that the production of
documents may be compelled as provided in Bankruptcy Rule 9016.
Bankruptcy Rule 9016 provides that Rule 45 of the Federal Rules
of Civil Procedure applies. Rule 45 permits a command to produce
documents to be included in a subpoena.
Local Bankruptcy Rule 2004 attempts to alleviate the
burden and expense of the use of subpoenas to obtain documents in
bankruptcy cases. That rule provides in pertinent part that if a
party to be examined has objections, that party has the burden of
seeking relief from the court by filing a motion to quash or for
a protective order. The rule additionally provides that if
anyone has been unreasonable in seeking or resisting discovery
under Bankruptcy Rule 2004, the court may award sanctions.
In the instant case, after Trustee conducted an
examination of Debtor under Bankruptcy Rule 2004, the Trustee
requested production of documents Trustee asserts were requested
Case 07-33986 Document 90 Filed in TXSB on 01/24/08 Page 8 of 10

9
at the examination. The notice of 2004 examination is not in
evidence. Nevertheless, Debtor has a duty to turn over such
documents, to the extent the documents are in his possession,
custody, or control, and to assist the Trustee in recovering such
documents, to the extent they are not in his possession, custody,
or control. 11 U.S.C. §§ 521(a)(3), 521(a)(4).
In the instant case, the only evidence as to Debtor's
compliance with the Trustee's request is a portion of Debtor's
testimony which the court has found lacking in credibility. The
court concludes that the best way to ensure Debtor's compliance
is to order that, as to each item requested by Trustee, Debtor
shall produce, within 10 days from entry of this order,
after diligent search and request of entities to which he has
access, all documents responsive to Trustee's request, and file a
statement, sworn by Debtor pursuant to 28 U.S.C. § 1746, and
signed by Debtor's counsel of record pursuant to Bankruptcy Rule
9011, stating that, after diligent search and request of all
entities to which he has access, he has produced all documents
and as to any document not produced, the reason it is
unavailable.
Because Trustee has conducted discovery informally,
pursuant to Local Bankruptcy Rule 2004, and because Trustee has
not presented the documents underlying his discovery requests,
the court declines to award sanctions at this time. Debtor and
Case 07-33986 Document 90 Filed in TXSB on 01/24/08 Page 9 of 10

10
Debtor's counsel should be cautioned that if they fail to comply
with this court's order, sanctions will in all likelihood issue.
Signed at Houston, Texas on January 24, 2008.
LETITIA Z. CLARK
UNITED STATES BANKRUPTCY JUDGE
Case 07-33986 Document 90 Filed in TXSB on 01/24/08 Page 10 of 10