Bankr. No.:
91-50357
Adv. No.:
98-5003
Chapter:
7
Date of Decision:
June 10, 1998
Issue:
Whether Debtors' discharge should be revoked where Debtors did not originally schedule cash received pre-petition and also did not testify truthfully at the § 341 meeting regarding the cash but where Debtors' disclosed the funds upon conversion to Chapter 13, where one Debtor was later convicted of bankruptcy fraud and completed the restitution order entered by the District Court, and where the Trustee knew about the fraud before the conversion of the case before conversion to Chapter 13 and later re-conversion to Chapter 7?
Ruling:
The discharge was revoked. Section 727(e) gave the Trustee until the case was closed to seek revocation under § 727(d)(2). Section 727(d)(2) does not impose on the plaintiff a "lack of pre-discharge knowledge" of the fraud as does § 727(d)(1). Consequently, Defendants-Debtors could not argue that the complaint was untimely or that Plaintiff-Trustee was barred by laches from bringing the revocation complaint so late in the case. Further, § 727(d)(2) does not provide that a debtor can avoid revocation by later disclosing an asset or by completing a criminal sentence.
Full Bankruptcy Court Decision:
