Memorandum of Decision Re: Denial of Discharge

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Decisions
IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA
In re DOUGLAS MABERRY,                                                                                            No. 97-13026                Debtor. ___________________________/ CHARLES SIMS, Trustee,                Plaintiff,       v.                                                                                                                         A.P. No. 97-1296 DOUGLAS MABERRY,                Defendant. ______________________________/
Memorandum of Decision
     Debtor Douglas Maberry was operating an auto repair business on August 12, 1997, the day he filed his Chapter 7 petition. On that day, he had approximately $4,000.00 in accumulated cash and undeposited checks from the week's receipts. In addition, he had $17,500.00 in his business bank account. In his schedules, he stated that he had $50.00 in cash on hand and $250.00 in bank accounts. The trustee discovered that these statements were false, and by this adversary proceedings seeks denial of Maberry's discharge pursuant to section 727(a)(4)(A) of the Bankruptcy Code.      Mayberry admits that his schedules were false. As to the bank account balance, he claims that his attorney told him that the amount he should schedule was the amount in his checkbook, not the balance on the bank's books. As to the cash and undeposited checks, Mayberry raised no clear defense.      There was no substantial evidence to support Maberry's allegation that he was relying on the advice of his counsel. The advice Maberry says he received is contrary to the advice any competent bankruptcy attorney would give. The attorney in question did not testify. The court finds that Maberry did not prove that he was relying on his attorney's advice in filing false schedules.      It is of course possible that Maberry misunderstood his counsel's advice, so that his false schedules would not result in a denial of discharge because they were not knowingly and fraudulently false. However, this would not explain the $4,000.00 in business receipts which Maberry failed to schedule and deposited into his bank account after his petition was filed, even though they were on hand when he filed. Taking all the circumstances into account, the court finds that it is more likely than not that Maberry intended to deceive his creditors and the trustee when he made his false statements.      In addition, Maberry failed to schedule real property he owned at 1017 Evans Street in Napa. Maberry argues that he had no realizable equity in this property, but lack of value does not excuse a false schedule. In re Chalik, 748 F.2d 616, 618 (11th Cir.1984). Maberry also falsely stated that he had made no transfers of any property within one year of his bankruptcy filing when in fact he had transferred title to this same property within one year before accepting a deed for its return.      Once the trustee shows that a debtor's schedules are false, the burden shifts to the debtor to show that he did not have fraudulent intent. In re Tully, 818 F.2d 106, 110 (1st Cir. 1987). The trustee in this case has shown that Maberry's schedules were pervasively false, and the court finds Maberry's explanations unconvincing. Accordingly, Maberry's discharge will be denied. The trustee shall recover his costs of suit.      This memorandum constitutes the court's findings and conclusions pursuant to FRCP 52(a) and FRBP 7052. Counsel for the trustee shall submit an appropriate form of judgment forthwith.
Dated: June 8, 1998                                                                                        _______________________                                                                                                                        Alan Jaroslovsky                                                                                                                        U.S. Bankruptcy