In re Colvin (Ch. 7 Case No. 10-32367, Adv. No. 11-03035)

The state court had held the debtor and his corporation in contempt of court for failing to produce certain maintenance records on a jet aircraft that was owned by the creditor, and certain personal property in which the creditor held a security interest.  The creditor argued that the contempt order was entitled to collateral estoppel effect in its objection to discharge and dischargeability actions against the debtor.  The bankruptcy court held that although the contempt order was a final order and that the debtor was bound by the order, that the contempt order had not resolved the same or similar issues presented in the creditor’s objection to discharge under 11 U.S.C. § 727(a).  The bankruptcy court, however, held that the contempt order had established that the debtor had willfully and maliciously injured property and collateral of the creditor and that the creditor’s claims for those injuries were nondischargeable under 11 U.S.C. § 523(a)(6).

Tuesday, August 28, 2012