1 

UNITED STATES BANKRUPTCY COURT 

FOR THE EASTERN DISTRICT OF VIRGINIA 

Alexandria Division 

In re: ) 

) Bankruptcy Case 

TIFFANY BESTANI, ) No. 16-12768-BFK 

) Chapter 7 

Debtor. ) 

____________________________________) 

TRUSTEE’S OBJECTIONS TO EXEMPTIONS 

COMES NOW, H. Jason Gold, chapter 7 trustee, by undersigned counsel, and objects to 

the claimed exemptions of Tiffany Bestani (“Debtor”), stating to the Court as follows: 

SUMMARY OF ARGUMENT

The Debtor is attempting to exempt previously undisclosed property in a reopened case in 

direct violation of settled law in this district and Rule 1009 of the Federal Rules of Bankruptcy 

Procedure. It is undisputed that the Debtor had an ownership interest in a website when she filed 

her petition in August 2016. During her case, the Debtor never disclosed this asset to the Trustee 

and failed to amend her schedules at any point before the case was originally closed. The Debtor 

is now, over a year after the case was originally closed, trying to exempt property that she 

otherwise hid from the Trustee and the Court. Not only is the Debtor estopped from claiming an 

exemption in any property by the Federal Rules of Bankruptcy Procedure and established case 

law within this district but also by the equitable doctrine of laches. The Trustee had already 

administered the property subject to court approval before the Debtor claimed this exemption. 

Moreover, a look at the totality of the circumstances of the Debtor’s conduct and candor (or lack 

thereof) throughout this case supports denial of her claimed exemption. 

Case 16-12768-BFK Doc 57 Filed 02/09/18 Entered 02/09/18 15:29:39 Desc Main

 Document Page 1 of 6
2 

BACKGROUND

1. On August 11, 2016, the Debtor filed her voluntary petition under chapter 7 of the 

Bankruptcy Code. 

2. In her petition and schedules filed with the Court under oath, the Debtor did not 

disclose her interest in any domain names. 

3. On September 30, 2016, the Trustee entered the Report of No Distribution 

(Docket Entry 12). 

4. On December 7, 2016, Debtor received her discharge. 

5. On December 12, 2016, the case was closed. 

6. On September 29, 2017, the Trustee, upon learning of potential undisclosed 

assets, filed his Motion to Reopen Case (Docket Entry 16), which was granted by this Court on 

October 24, 2017. 

7. The potential undisclosed assets consisted of various domain names and accounts 

(“Property”). 

8. On October 31, 2017, the Debtor’s case was reopened. 

9. On November 1, 2017, H. Jason Gold was appointed as chapter 7 trustee. 

10. On January 3, 2018, the Trustee filed his Motion to Sell Property of the Estate 

(Docket Entry 44) to quitclaim the Debtor’s interest in domain names and all related portions of 

any pending litigation that were not abandoned by the Trustee for $10,000.00 (“Motion to Sell”). 

11. On January 11, 2018, the Debtor filed certain amended schedules (Docket Entry 

48). 

Case 16-12768-BFK Doc 57 Filed 02/09/18 Entered 02/09/18 15:29:39 Desc Main

 Document Page 2 of 6
3 

12. On amended Schedule A/B: Property, the Debtor listed her interest in 

“collarme.com (website)” (“Website”) with a value of “Unknown.” 

13. On amended Schedule C, the Debtor claimed an exemption in the Website in the 

amount of $10,000.00 under 11 U.S.C. § 522(d)(5) (“Exemption”). 

14. On February 6, 2018, the Court entered an order granting the Motion to Sell 

(Docket Entry 54). 

ARGUMENT

15. The Exemption is improper for the following reasons: (i) the Debtor may not 

exempt previously undisclosed property after her bankruptcy case has been closed, irrespective of 

the fact that the case was subsequently reopened; (ii) the Debtor is barred by the doctrine of 

laches to take advantage of an exemption over a year after the case has been closed; and (iii) the 

totality of the circumstances surrounding the failure to disclose reflects an intent to defraud the 

creditors and a pattern of behavior designed to deceive the Trustee, her creditors, and the Court. 

16. Rule 1009 of the Federal Rules of Bankruptcy Procedure provides that a debtor 

only maintains the right to amend the schedules, statements, and lists prior to the closing of the 

bankruptcy case. In re Wilmoth, 412 B.R. 791, 796-97 (Bankr. E.D. Va. 2009). 

17. Judge Kevin R. Huennekens in Wilmoth explained that “[r]eopening a case does 

not automatically grant the Debtor a right to amend schedules or take other actions that ought to 

have occurred prior to closing; instead, the reopening of the case allows administrative and 

ministerial loose ends to be tied.” 412 B.R. at 795; see also In re Poulette, 493 B.R. 729 (Bankr. 

Case 16-12768-BFK Doc 57 Filed 02/09/18 Entered 02/09/18 15:29:39 Desc Main

 Document Page 3 of 6
4 

D. Md. 2013) (following Judge Huennekens’ legal analysis in Wilmoth). Judge Huennekens 

went on to note that: 

A reopened case is not the same as a never-closed case. Unless the Court is to 

ignore the plain language of Rule 1009 of the Federal Rules of Bankruptcy 

Procedure, the time within which the Debtor had to amend Schedule C and claim 

the Cause of Action exempt as a matter of right was before the case was closed.

The Debtor’s right to amend the exemption schedule ended with the closing of the 

case. 

Id. at 796 (emphasis in original). 

18. The Debtor signed the original schedules under penalty of perjury and indicated 

by that signature that all assets were disclosed. 

19. Furthermore, in equity, laches bars the Debtor from asserting exemptions in 

undisclosed property over a year after the case was closed. The Debtor owned the Website prepetition and yet took no action to amend her schedules at any point during the case for over a 

year. Even after the case was reopened, the Debtor still did not seek amendment until after the 

Trustee entered into a contract for the sale of, among other things, the estate’s interest in the 

Website. The Debtor should not be permitted to benefit from the late filed Exemption when she 

failed to disclose the asset both on her schedules and when asked to disclose all assets at the 

meeting of creditors. 

20. Moreover, the Debtor is attempting to exempt property that the Trustee has 

already administered. The Trustee filed his first motion to sell, among other things, the Website 

on November 1, 2017 (Docket Entry 24). The Trustee withdrew the first motion and filed his 

revised Motion to Sell on January 3, 2018. It was only after the Trustee’s revised Motion to Sell 

was filed, over a year and a half after the Debtor’s case was originally closed, that the Debtor 

Case 16-12768-BFK Doc 57 Filed 02/09/18 Entered 02/09/18 15:29:39 Desc Main

 Document Page 4 of 6
5 

filed her amended schedules and exemptions. The Debtor had ample time after she originally 

filed her petition to disclose the Website and claim it as exempt but plainly failed to do so. 

While no bankruptcy sale is complete until court approval is obtained, the actual transaction is 

materially consummated when the parties enter into a binding contract. 

21. Finally, the totality of the circumstances of this case argues against allowance of 

the Exemption. The Debtor failed to disclose the Website on her schedules and at her meeting of 

creditors, in direct violation of her duty to truthfully disclose all assets. The Debtor clearly knew 

about her interest in the Website because in the state court lawsuit the Debtor filed shortly before 

the meeting of creditors, she asserted an ownership interest in the Website. The Debtor was 

asked to list her assets on her schedules and failed to do so. At the meeting of creditors, the 

Debtor was asked whether she had fully disclosed her assets, to which she incorrectly responded 

that she had. See Exhibit 1 to Debtor’s Motion to Compel Abandonment of Property (Docket 

Entry 30), Transcript of 341 Meeting, p. 5, lines 2-18. The actions of the Debtor reflect a blatant 

intent to deceive the Trustee, her creditors, and the Court, and consequently, the Court should 

disallow her Exemption. 

CONCLUSION

WHEREFORE, the Trustee, having objected to the claimed Exemption of the Debtor, 

requests that this Court enter an order: (i) sustaining the Trustee’s objection stated herein and 

denying the Debtor’s claimed Exemption; and (ii) for such other and further relief as may be 

necessary. 

Case 16-12768-BFK Doc 57 Filed 02/09/18 Entered 02/09/18 15:29:39 Desc Main

 Document Page 5 of 6
6 

Respectfully submitted, 

H. JASON GOLD, TRUSTEE 

By Counsel 

NELSON MULLINS RILEY & SCARBOROUGH LLP 

101 Constitution Avenue, NW, Suite 900 

Washington, DC 20001 

Telephone: (202) 712-2800 

Facsimile: (202) 712-2860 

By: /s/ David M. Barnes, Jr. 

H. Jason Gold, Va. Bar No. 19117 

David M. Barnes, Jr., Va. Bar No. 86747

Counsel to the Chapter 7 Trustee 

CERTIFICATE OF SERVICE 

I HEREBY CERTIFY that on this 9th day of February 2018, the foregoing was served via 

first class mail, postage prepaid, to: 

Office of the United States Trustee 

115 South Union St., Suite 210 

Alexandria, Virginia 22314 

Robert Sergio Brandt 

The Law Office of Robert S. Brandt 

1513 King Street 

Alexandria, VA 22314 

Counsel to the Debtor 

/s/ David M. Barnes, Jr. 

 David M. Barnes, Jr. 

Case 16-12768-BFK Doc 57 Filed 02/09/18 Entered 02/09/18 15:29:39 Desc Main

 Document Page 6 of 6