IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
|DO NOT PUBLISH
This case disposition has no value as precedent and is not intended for publication. Any publication, either in print or electronically, is contrary to the intent and wishes of the court.
RICHARD E. JOHNSON, No. 95-11529
STEPHANIE J. CASEY,
v. A.P. No. 95-1260
RICHARD E. JOHNSON,
Memorandum of Decision
Between the time plaintiff Stephanie Casey obtained a state court
judgment against him and the time he filed his Chapter 7 petition, debtor and defendant Richard
Johnson obtained $105,000.00 in loan proceeds, about $40,000.00 from the sale of business
assets, and several thousand dollars in credit card cash advances. Johnson alleges that he spent
all of the money on travel, alcohol, gambling, and prostitutes. In this adversary proceeding,
Casey objects to his discharge pursuant to sections 727(a)(3) and (5) of the Bankruptcy Code.
The court believes little of Johnson's testimony. He claims many trips to
Nevada, but can document only a few. At least one of his claimed cruises never happened. The
court finds it more likely than not that Johnson still has a portion of the unaccounted-for funds.
While Johnson's health is poor, his medical condition did not keep him
from maintaining adequate records. His reason for not having any records is that "If I saved all
my records I'd have a houseful of garbage." Johnson should have kept that "garbage" if he
expected the court to believe his story. It appears that Johnson had extensive legal advice during
the time in question, and engaged in considerable pre-bankruptcy planning. The court does not
buy his story that he had the records but threw them out.
Courts have consistently held that vague and unsubstantiated claims of
gambling losses do not satisfactorily explain loss of assets so as to preserve a right to discharge.
In re Dolin
, 799 F.2d 251 (6th Cir.1986); Matter of Reed
, 700 F.2d 986, 993 (5th Cir. 1983);
In re Wilch
, 157 B.R. 342, 345 (Bkrtcy.N.D.Ohio 1993); In re Burns
, 133 B.R. 181, 185
(Bkrtcy.W.D.Pa.1991); In re McMahon
, 116 B.R. 857, 861 (Bkrtcy.M.D.Fla.1990); etc., etc.
The court finds that Johnson's explanations are not satisfactory, and
judgment will accordingly be entered denying his discharge. Casey shall recover her costs of
This memorandum constitutes the court's findings and conclusions
pursuant to FRCP 52(a) and FRBP 7052. Counsel for plaintiff shall submit an appropriate form
of judgment forthwith.
Dated: August 8, 1996 _______________________