SE Property Holdings, LLC v. Green, No. 19-30325 (5th Cir. 2020)Annotate this Case
After debtor filed for Chapter 7 bankruptcy, SEPH sought a judgment of nondischarge for $41 million that debtor owed. SEPH argued that debtor violated 11 U.S.C. 523(a) through two improper transactions: 1. intentionally diverting funds from SEPH by making disguised distributions to himself via sham real estate investments; and 2. purposefully withholding the Livingston Parish receivables from SEPH. The district court granted summary judgment in favor of debtor.
The Fifth Circuit held that SEPH has raised a genuine dispute of material fact as to the impropriety of the Livingston Parish transaction. The court held that the bankruptcy court erred in assessing the evidence, and the issue of who to believe -- debtor (that he did receive consent) or SEPH (that no such consent was given) -- is a credibility determination for a finder of fact, not a query for summary judgment review. However, the court held that the bankruptcy court was correct to grant summary judgment in debtor's favor as to the disguised distribution transaction. Accordingly, the court affirmed in part, reversed in part, and remanded in part.