The following is a summary of a Minnesota bankruptcy case or a case relevant to Minnesota bankruptcy law.
Minnesota Bankruptcy Case:
Doeling v. Coating Specialties, LLC (In re Toftness), ADV 09-6015 (Bankr. D. Minn. 6/1/10) (O’Brien, J.).
Failure to List Assets Results in Denial of Discharge
The trustee sued to revoke the debtor’s discharge under 11 U.S.C. § 727(d)(2) for failure to disclose and turn over estate property allegedly received post-petition. The debtor, Toftness, filed bankruptcy in 2007. He listed an ownership interest in Coating Specialties, Inc. There were three companies by that name: a Minnesota business that closed in 2006; a Colorado company that was formed in 2006; and a Minnesota LLC that was formed in 2007. The 2007 Minnesota company was funded with assets and project proceeds from the other two corporations. The court did not believe Toftness’s testimony that he did not own the 2007 Minnesota company.
In 2005, a promissory note was executed by Viking Energy, LLC in favor of Setco Utility Company, Inc., a Kentucky Corporation, for $700,000. The court found that Toftness failed to disclose that Viking made payments of $425,000 on the note through June 2007, which were received by Toftness directly or through the Coating Specialties companies. The court ruled for the trustee revoked Toftness’s discharge.
Credit: The preceding was a summary of a case relevant to Minnesota bankruptcy law. The case summary was prepared by the U.S. Bankruptcy Court through Judge Robert J. Kressel & attorney Faye Knowles.