Understand the complexities and nuances of the Bankruptcy Code to better advise clients and prepare for court.
By Daniel Gill
A couple’s Chapter 7 case could be dismissed as a bad faith filing, a Florida federal judge ruled. Their assets far exceeded their debts, and the case was filed merely to thwart a state court complaint to make them sell their house as they had agreed ( Mirzataheri v. Dunn , 2017 BL 215352, S.D. Fla., No. 15-cv-22414-WILLIAMS, 6/20/17 ).
Considering the totality of the circumstances around the filing, the bankruptcy court properly dismissed the case and sanctioned the debtors in the amount of the trustee’s fees, according to the opinion of Judge Kathleen M. Williams of the U.S. District Court for the Southern District of Florida.
On April 14, 2014, FM East Developers LLC entered a contract with Ali Ashgar Mirzataheri and Soledad Mirzataheri for the sale of the Mirzataheris’ residence. When the Mirzataheris failed to close, FM East brought suit in a Florida court to compel them to perform under the sale contract.
Only four days after they were served with the state court suit, the Mirzataheris filed for Chapter 7 on Aug. 22, 2014. They listed assets of more than $850,000 and liabilities of just over $30,000, the court said.
In affirming the bankruptcy court decision, Williams said the Mirzataheris’ debts “constituted a small fraction of their assets and income, and they had more than sufficient assets to satisfy their debts.” In fact, the debtors even admitted to the bankruptcy court that the only reason they filed bankruptcy was to avoid the sale of their residence to FM East.
The district court also affirmed the bankruptcy court’s order that the Mirzataheris be sanctioned for their bad faith by paying the trustee about $16,000 for attorneys fees and costs she incurred in the case.
The Mirzataheris were represented by Rex E. Russo, Coral Gables, Fla. FM East Developers LLC was represented by Eric J. Silver, Miami, and Jessika A. Graham, Miami, represented Marcia T. Dunn, the Chapter 7 trustee.
To contact the reporter on this story: Daniel Gill in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Jay Horowitz at JHorowitz@bna.com
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)