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In re Guiness 9th circ BAP
Discussing the meaning of "owed to or recoverable by a spouse, former
spouse, or child" of 101(14)(A).
Court ordered debtor and her husband to pay $280k to H's ex-wife and her
attorney for fees in a fraudulent transfer action related to transfer/hiding
of assets in an earlier divorce. H had transferred community property
assets to (soon to be) wife in order to conceal them in divorce.
Debtor filed adversary to declare the fees dischargeable under 523(a)(5) and
(a)(15). Judge Kaufman found the debt dischargeable. She distinguished
prior atty fee cases that did not require direct payment to the spouse,
former spouse or child, but had focused on whether they had or would receive
some benefit.
BAP confirmed.
This case is an exception to the general loose rule regarding the "spouse,
former spouse" requirement. It turns on the fact that the debt is owed by
current W to exW, who is neither a spouse, former spouse or child of current
W. And of course H will benefit from the discharge injunction in 524(a)(3)
(in re Kimmel) and if exW did not timely sue exH for non-dischargeability, H
is now on a very short leash held by W.
With the amount of money at stake, we would expect an appeal to the 9th
circuit.
The case also has a good discussion of this area of the law for those who
would like a primer.
If you have any questions or concerns, please contact me.
Pat
Patrick T. Green
Attorney at Law
Fitzgerald & Green
1010 E. Union St. Ste. 206
Pasadena, CA 91106
Tel: 626-449-8433
Fax: 626-449-0565
pat@fitzgreenlaw.com
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