In re: Delloso, No. 22-2532 (3d Cir. 2023)
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Kapitus purchased receivables from Delloso's company, Greenville Concrete, for $909,775. In 2013, Kapitus sued for breach of contract. Greenville defaulted on a subsequent settlement. Kapitus obtained a state court judgment against Delloso and Greenville for $776,600.25. In 2016, Delloso filed a Chapter 7 voluntary bankruptcy petition in which he listed the $776,600.25 debt and disclosed that his sole employer was “Bari Concrete.” The Bankruptcy Court notified the creditors of the last day to oppose dischargeability; the trustee explained that because this was a “no-asset case,” creditors should not file proofs of claim unless it appeared that assets would be available. Kapitus did not file a proof of claim. None of Delloso’s creditors filed adversary complaints. The Bankruptcy Court granted Delloso’s discharge and, in August 2016, closed the case. In 2021, Kapitus moved to reopen the case, alleging that it learned that Bari used the same addresses previously associated with Greenville, was controlled by Delloso, and appeared to be "a mere continuation of Greenville.”
The Bankruptcy Court declined to reopen Delloso’s case under 11 U.S.C. 523(a) or revoke the discharge under section 727(d)(1) as obtained through fraud. The Third Circuit affirmed. Any complaint to assert that the debt was not dischargeable was untimely and the time could not be extended by equitable tolling. Even if Kapitus’s allegations were true, it could obtain appropriate and sufficient relief by suing Delloso and Bari in state court, which Kapitus had already done.
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