Creditor, a retirement fund, filed a nondischargeability action against Debtor under 11 U.S.C. §523(a)(2)(A) alleging the Debtor's omissions and misrepresentations to Creditor were material and thus nondischargeable. The Debtor previously operated an investment firm in which Creditor placed funds for retirement. The Debtor failed to disclose personal ties and interests to a company to which the investment firm extended a loan that was funded by the Creditor. In analyzing whether the Debtor incurred a debt to the Creditor by soliciting, receiving and refusing to account for assets through false representations and material omissions, the Court looked to the Restatement (Second) of Torts §551(2). The Court concluded that the parties' relationship was one of trust and confidence which triggered the Debtor's duty to exercise reasonable care to disclose material information. The Debtor failed to uphold this duty to disclose by omitting and misrepresenting significant information that was material to the Creditor's investment decisions. The Creditor justifiably relied on the Debtor's representations and omissions in making investment decisions and was harmed as a result.

The United States Trustee brought a motion to dismiss the Debtors' case for substantial abuse of the bankruptcy system as provided by 11 U.S.C. § 707(b). The Debtors had filed a Chapter 7 case but their household income was greater than $150,000 per year. Applying the "totality of the circumstances" test set forth by the Tenth Circuit Court of Appeals in the case of Stewart v. United States Trustee (In re Stewart), 175 F.3d 796, 809 (10th Cir. 1999), the Court granted the Trustee's motion but stayed the effectiveness of the order for ten days to allow the Debtors to convert their case to one under Chapter 11 or Chapter 13. Although the Court determined that the Debtors' ability to repay debt was the primary factor in its analysis, the Court considered other factors as well including whether the Debtors suffered any unique hardships, whether cash advances and purchases exceeded the Debtors' ability to pay at the time they were incurred, whether the Debtors had a stable source of future income, whether the Debtors current expenses could be reduced without deprivation of necessities, whether the Debtors qualify for Chapter 13 relief, and the Debtors' good faith. The Court determined, based on an analysis of each factor, that the case should be dismissed primarily due to the amount of surplus income that the Debtors should have under a plan of reorganization and the Debtors' failure to provide accurate information regarding their household income and expenses on their bankruptcy schedules at the time the case was filed or in any written amendments.

The Chapter 7 Trustee brought a motion to require the Debtors to turnover property of the estate to the Trustee. The property consisted of $825.74 that existed in the Debtors' bank checking account at the time the case was filed. The Debtors originally filed the case as a Chapter 7 case, but following their 341 meeting, the Debtors converted their case to one under Chapter 13. Approximately four months after the case was converted, the Debtors reconverted the case back to one under Chapter 7. Several months after the conversion back to Chapter 7, the Chapter 7 Trustee brought his motion for turnover seeking the money that existed in the checking account at the time the case was originally initiated. During the course of their case, the Debtors had spent the money in their checking account on moving expenses and on other ordinary living expenses. The Debtors were never put on notice that the Trustee would seek turnover of those funds until nearly sixteen months after the case was filed. The Court held that under 11 U.S.C. § 348(f) property of the Debtors' Chapter 7 estate after conversion from Chapter 13 consisted of property that remains in possession of the debtor or is under the control of the debtor on the date of the conversion and, therefore, did not include the checking account funds that had been subsequently consumed before the conversion back to Chapter 7. The Court also concluded that it may not rule the same in a case where a debtor converted to another chapter in bad faith.

A creditor filed a motion to dismiss the case with prejudice pursuant to 11 U.S.C. § 109(g)(1). Based upon the debtor's failure to file required papers or attend the first meeting of creditors, combined with his admission that the debtor had no intent to prosecute the case, the Court granted the motion.The debtor filed a chapter 13 petition in order to stave off a pending foreclosure and allow time to consummate a sale of the property. The debtor failed to file a list of creditors and their addresses, failed to file any statements or schedules and failed to file a plan of reorganization in violation of 11 U.S.C. § 521, Fed. R. Bankr. P. 1007, LR 2002-1(d) and LR 5005-1. These failures are also failures to appear before the court in proper prosecution of the case within the meaning of 11 U.S.C. § 109(g)(1).The debtor offered several explanations for his conduct, but the Court found only one explanation to be credible. The debtor intended to satisfy all of his creditors through a sale of the property on which foreclosure was pending, and had no intent to pursue reorganization under the Bankruptcy Code. On that basis, the Court concluded that the debtor's failures to appear noted above were willful and dismissed the case with prejudice.