proceed may please the court i'm charles venice for the opponent theodore pres i was also a bankruptcy attorney in the underlying matter so i'm intimately familiar with all the details of what happened in the matter  the biggest issue that we've cited are what i believe to be repeated intertwining of the bankruptcy courts ultimate decision in this matter between the elements of concealment under section seven inquire on these types of matters and that's where the st issue really arises is with the concealment element concealment requires an intent to hinder or delay creditors or potentially the bankruptcy trustee in the transfer or concealment of property of the debtor within one year prior to the filing of a bankruptcy petition in the th circuit in chini in re keeney made it very clear all those elements apply it's not about omitting something from the petition it's about a transfer that occurred before the petition was filed something was done to hide an asset something was done to conceal an asset not i fail to to list an asset and so with that said most of the issues in this case should have been would be false oath under the false oath element where a debtor fails to list an asset or property that should been or may have been omitted from a petition either way the elements of fraudulent intent are the elements of both concealment under to a  oath under for it are the same or looking at fraudulent intent we have to look at the subjective mind of the debtor to determine what was their intent in leaving things out why did they do it was there some type of motive was there some type of scheme behind it but that's a factual question as council sure is and if you're looking at facts that that are on a different element of concealment of assets if you're looking at the elements of concealment and applying facts from concealment to find it a finding a false oath and you're going in the wrong direction and that's what we think when it went on here other words your position is you can't the trial court should not have used drawn inferences based on facts that were more relevant to the a to a in making a finding under a four well i  mean i would say that yes i would say that but more importantly we just don't know what the truck or consider since the since the conclusions made involve both elements we don't know where what facts are really  determined to come to the final conclusion if we're looking at one different two different elements that's where i've been well i'll get into each one in a moment to show where the distinctions are but again we were requiring knowledge and specific intent on behalf of the debtor  see to speak to the specific issues that were in this case there were four of them and i would concede that they all would be potentially falso this so the debt or the easiest one to look at is a chase bank account for whatever reason this bank account was not listed in schedule a b of the petition or it might even be at the time but it wasn't listed don't know how that happened it never came up until trial it wasn't listed that debtor had provided documents throughout the proceeding to both the u s trustee and the standing trustee for this bank account literally at trial the u s trustee argued that you failed to list a dollar bank account and then really realize no it's not a dollar bank account it's actually questioning it was more about the fact that we had already introduced all these bank statements are ready because we were looking into the income elements that were being drawn from the bank statements not at the actual bank statements themselves being omitted i didn't specifically object i don't know that i'd need to because it's really about the matter of knowledge that the debt or even no he omitted it i would say no it's pretty evident that he didn't know it was in there i didn't know it was in there the trustee wasn't was confused about what was listed and what wasn't it wasn't about that it was more about what income that was listed in there another element another one of the false oath was missing so we believe that there was no knowledge that that the had that the bank account was missing from the petition it was surprise at trial and the only issue the only reason the bank statements were even involved in the case was to show income that the debtor had received from his whol owned escrow his wholly owned escort so that was the only reason the bank statements were in that's what we were looking for we weren't hiding the bank statements there was no there was no motive not to have it there the bankruptcy court made a conclusion that isn't theirs it's no more in the facts it's just a conclusion made to fit the elements of talked she uses the words to tell you of circumstances but they're not that it just doesn't add up so the valu was the nd issue a false oath so we listed precision security inc which is an s corporation and as having a value of zero not so much the corporation as a value zero but the member or his his stock in the company had a value of zero when we value common stock usually look at the value of the stock in this case this company had a one million one hundred thousand dollars judgment against that stock as a wholly owned and he had virtually no value we believe no value at all there's no evidence that it had any value instead the court looked at well it must have value because the company had assets but that doesn't create value can't s stock to something that it could but nobody would buy it you can attempt to sell but nobody would buy stock to something that has no chance of being sold or liquidated for a monetary amount beyond  the liabilities of the company so we value the common stock of the company at zero in this particular instance and the assets of the business are not the debtors it's the common stock that's the debtors and in the actual instructions for schedule b specifically stated value the debtors interest in the entity not the company itself so this wasn't about what the companies were threatening to divorce action but rather what his interest in it his common stop was worth and we believe it's zero to this day at zero can't sell the thirty year old company with a key key principle not not marketable correct that that's precisely the irgun we're making is that it's a closely held company happens all the time in small business bankruptcies an individual has a small business both him and the and the company are woefully your multiple times so there's a no asset report never any assets found despite all of the omissions and i know that materiality has to do more when we're looking at the elements of fraudulent intent materiality has to do more with whether relates to the business and to the bankruptcy but in this case it should also to some extent relate to whether there was any harm done to anybody  just to complete my argument the rd element was the failure to list a company by the tech name of t sixty nine p t sixty nine p was a company that received or had real estate transferred from person the s corp we just talked about into this l l c that was formed for the purpose of insurance he ran a security business that had guns and other types of items and they didn't want to have the company own the property they needed it being a different entity for the insurance purposes so that's why it was formed it never really went beyond formation in ohio you can form a company simply by filing a certificate with the ohio secretary of state that certificate doesn't show any membership interest it just shows who the corporator who the person who form form that was it doesn't say that the member a lawyer can do it every day it doesn't mean the member or the shareholder so there's no indication as to who the member was and with regard to concealment it was just the was the debtors than it should have been if it's precisions and it should have been our conclusion was it was pursued property and therefore should not have been listed the last item was in the biggest item was the income that the debtor derived from his s corporation so like your honor just mentioned with a closely held company an s corporate all of the profits all timidly are imputed to the debtor and that person ultimately has to file them on their personal income tax returns the profits so in this case debtor had been in broiled in some legal affairs and he was he had not yet filed his tax returns for two thousand and fourteen or fifteen just thirteen he duly listed the income from the s corp on the statement financial affairs for two thousand and thirteen and put unknown and fourteen and fifteen he did not list income he derived from the s corp on schedule i the reason being that it's not regular it's not it can't be discerned really till the end of the year what exactly he received about that because you indicated in your brief that that mr president chapter thirteen because he was above the debt limit but what if he had filed a chapter thirteen wouldn't that be relevant at least disclosed in somewhere on schedule i add to this potential income or or some reference to that so that interested parties could determine what his actual income and expenses would be on a regular basis yes your honor it would be relevant in that situation we definitely disclosed it and we'd have to somehow account for it but it's difficult to say that he gets this much per month and in fact some years he gets nothing may i go on for a minute with the questions ok but with regard to that ultimately it was the fact he did disclose the fact that he had income from it he just didn't know because his tax returns hadn't been complete and that's the reason it was not listed as to reason it was omitted there was nothing to be gained by not showing it if he had filed  thirteen we would have had to show income annually and keep disclosing every year ready the plan least in our district we would have to do that so wouldn't been a difficult thing it would be more difficult to get his tax returns done but this was a  of a judgment and multiple garnishments and in this case though we do not believe that the us the bankruptcy court made the correct conclusion as to why the income was not listed think you weekend we cited that on page forty two of our brief albeit for a different proposition but in fact this court has previously determined that you don't need a disposition or transfer of property to satisfy su petition filing with your court see if i can also read those citations into the record or if you prefer i can just move on and because either way i believe the grounds under eighty four dollars are satisfied because the  and under reported the value of a th asset and his bankruptcy filings which you swore under penalty of perjury to be true and correct specifically the court found that mr prince had admitted income in the form of paid personal expenses and cash withdrawals that he was getting from a security company precision his ownership interest in three hundred and sixty nine p which own the property and which precision was operating and for which precision had taken out a loan to pay the mortgage and the rd was the existence of mr personal chase bank account which was active through the year until he filed for bankruptcy in which there are deposits of considerable amounts in which from sources that mr prist declined at trial to identify and the court also found that president misrepresented the value of his interest and precision as zero the court found the true value was higher if you looked at precision as an ongoing concern that's what it states and page four of it's all ruling  precision as an ongoing business concern in light of the profits it was making in the income mr purpose was receiving clearly had a higher value than zero and the court looked at the totality of the circumstances in particular the one million two hundred thousand dollars judge judgment against mr press and the pattern of admissions he made in the schedules each of which reflect in some way how well precision was doing and what value it was giving to m chapter seven trustee and that they really are immaterial considering his assets compared to the his liability but she's sixty nine p was not disclosed know what his chase bank account he was specifically asked at his meeting dollar bank account he did not disclose his chase bank account despite the fact that he admitted to trial yes it was a very active account in which there were considerable hot deposits being made so that is inconsistent with his statement that it was a complete omission  preparing the schedules additionally in fact in his deposition which came out after his meeting of creditors mr purist was informed that the chase bank account was not in his bankruptcy schedules he was asked again with back county had he disclosed his dollar bank account and the chase bank account this time and then was asked why is not the chase bank account not in your schedules and this is in live  because one count by itself is more than enough to deny the discharge i would simply point out that there was a pattern of omissions all of which contributed to this bolsters the banks the courts finding that there was an intent to hide mr purposes financial against mr perez and then in the intervening time period both the presiding judge and the trial attorney for the u s trustee who was prosecuting this case i retired and so there was a long period of time  which the original complaint was filed where we there was no knowledge of this chase bank account until after discovery had occurred and then discovery was had begun and had stalled and there schedules during about the long delay in between the filing of the complaint and trial and yet he still did not amend or try to correct his schedules which again bolsters the facts the cult courts finding of intent complaint was filed in may two thousand and sixteen in the proceedings st stayed in november of two thousand and sixteen i believe the deposition was somewhere in between that time period i'm sorry to interrupt and i don't think you know mr pris disputes many things he disputes whether or not he undervalued his interest he disappears whether or not he actually and he sticks ninety he disputes whether the u s trustee should have been permitted to a most of all though he disputes the court's finding of intent but the bankruptcy court heard all of these arguments that mr president made and it considered and rejected based on the record before it and you know it  did so based on the trial that was conducted listening to the witnesses hearing their testimony and assessing the credibility and the court need it's factual findings that mr pearl has made its need these omissions with intent to hide his financial condition these findings are not clearly erroneous and they must be viewed with great deference on peale mr pris seems to recognize that the standard of review want to appeal might be a problem for him because on page for his reply brief he asked this court to review all of the opinion including the factual findings on a don't don't know the standard which is not the correct standard and in support of this statement  evidence of mistake of justice and mr press has not met that standard on appeal has any other questions of question regarding the motion to amend or conform  change the result a trial how do you square those two things oh i agree that it wasn't necessary your honor i believe we were acting out of sort of additional security perhaps you would say i don't believe it actually was necessary given that the  put people on notice of what they're going to be facing a trial and i understand they're liberally amended in all that including post trial in your case but how do you respond to the suggestion that this in the heat of trial this  chase bank issue which had some relevance perhaps to the income issue in other words this is where some of the money from precision was going and that's why it should have been disclosed under the sofa you knew it was coming in and you had those records aware that the bank account the personal bank accounts were not in a schedules as was clear through the course of discovery and to you know he had he had an issue with this notion that he was subtle i suppose and those the chase bank accounts were relevant to the seven hundred and twenty seven i guess the so for an issue you know the worst part of yourself problems with the software twenty million one hundred and forty two thousand and thirteen income was not disclosed and i think your argument was somebody is argument from your office was where you had all the records and you knew what was coming in so it's almost you know we can really complain that he didn't object on relevance grounds because that document the chase bank statements were relevant to the income issue but was how was he to know that you were going to make the omission from the schedules an to address that he should have said this is not in your complaint it's not you know i object and not on relevance but it's not in the complaint i think you saying that this is outside the scope of the complaint given what your honor said about like notice to the parties as to what the trial is going to be certainly being asked like these schedules don't reflect this personal bank account would have given the notice that it is being tried and so yes i think that that's when i do believe that it was incumbent upon mr prestwood jack to say i wasn't aware that this was going to be an issue here instead he seemed to accept yes of this and he really could not answer i'll start st with the chase to come i didn't even realize until counsel just mention the fact that it was mentioned at the deposition and the fact that the deposition was in two thousand and sixteen the trial in two thousand and eighteen i literally just heard this now so it i'm not i'm have no doubt she's accurately recited some facts for something that happened over a long long period of time but it simply was not made an issue is my point until two thirds almost three fourths of the way through the trial and as counsel just stated the point the debtor couldn't answer the question because he didn't have any idea it was missing and he just didn't realize that was an issue nor did i  it's and i didn't object because i didn't even know was being brought up it wasn't in the complaint so but the chase account at the beginning of her game and she mentioned of it that it was only presented as discovery and that's not true because at the debt at the three hundred and forty one dollars the trustee had requested bank statements as well as the u s trustees analyst miss lowman who testified at trial also requested these documents so this is this is stuff that was provided in that form the basis of their complaint when she did there's all these arguments that was provided after the complaint was provided before she died they had done a ton of analysis of the bank statements to determine that there was omitted income and that was the whole point of it so it was definitely given to the u s trustee almost from the outset of the case it was never intended to be omitted i think what mr pe perhaps matt is that he used it that account for his business transactions with in relation to perception but nonetheless it wasn't listed it should have been listed it was a mistake it was inadvertent i think that that evidence is clear just based on our debate about the matter one of the things that has been brought up though is in the st thing that counsel said is that it's really unclear as to what the court was deciding this case and so i want to read one passage and it says so the in this is on the oral decision it was made it bankruptcy docket number seventy one dollars and page six so the failure to have included precision benefits in income in the sofa and the schedules i find was done with the intent to actually have hidden information and therefore to present a false view of his financial condition in the caustic in the context of this case to the detriment of creditors and counsel just that we don't know what the court really decided how the law was applied we're talking about a pure concealment argument to find fraudulent intent for false oath that is what the argument has and that's why it was so difficult to brief the issue what are we briefing we briefing consum we briefing falso in this case there were technical falso there were false oaths all the time there are material in terms of the law but there immaterial in terms of amount in the outcome of the case this debtor was woefully insolvent under any standard of the word and even if these things were listed nothing would change no asset case he should have received a discharge he there's no way that you know it because it was hastily filed he hadn't completed his tax returns but yeah that was the one lesson to be learned here is perhaps half your financial matters and are in order but you don't always do that when you're being garnishing being sued with that said i do believe that this case should be reversed and whether under use of discretion standard or the novel standard and if the court has any further questions i'd be glad to answer