Krueger v. Torres, No. 14-11355 (5th Cir. 2016)Annotate this Case
After debtor flagrantly and repeatedly abused bankruptcy and court processes to retain assets for himself and defeat the legitimate claims of his business partners, the bankruptcy and district courts dismissed the bankruptcy case under 11 U.S.C. 707(a). The court concluded that the bankruptcy rules permitted this matter to be pursued as a contested motion, and the bankruptcy court conducted the proceeding appropriately. Moreover, any error by the bankruptcy court in hearing this matter as a contested motion was harmless. The court also concluded that debtor's right to due process was more than vindicated by the court’s processes. Further, this circuit joins those courts that have held a debtor’s bad faith in the bankruptcy process can serve as the basis of a dismissal “for cause,” even if the bad faith conduct is arguably encompassed by other provisions of the Code. In this case, there is no clear error in the bankruptcy court's findings. The record is replete with evidence that debtor filed bankruptcy for illegitimate purposes, misled the court and other parties, and engaged in bare-knuckle litigation practices, including lying under oath and threatening witnesses. Accordingly, the court affirmed the judgment.