* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not

be published and is not precedent except under the limited circumstances set forth in 5TH CIR.

R. 47.5.4.

United States Court of Appeals

Fifth Circuit

FILED

September 26, 2007

Charles R. Fulbruge III

Clerk

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 06-10620

Summary Calendar

In Re: JOHN C BAUM; LINDA D BAUM

Debtors

JOHN C BAUM

Appellant

v.

UNITED STATES TRUSTEE

Appellee

Appeal from the United States District Court

for the Northern District of Texas, San Angelo

No. 6:05-CV-76

Before JOLLY, DENNIS, and PRADO, Circuit Judges.

PER CURIAM:*
No. 06-10620

1 Excuses for the delays varied but generally related to the Baums’ inability to retain

counsel. 

2 The Trustee did not object to Linda Baum’s discharge, and she was discharged on

April 5, 2005.

2

Appellant John C. Baum (“Baum”) appeals the district court’s order

affirming the bankruptcy court’s judgment denying Baum’s discharge under 11

U.S.C. §§ 727(a)(2) and 727(a)(4). Finding no reversible error, we affirm.

I. FACTUAL AND PROCEDURAL HISTORY

A. Factual Background

Baum and his companies, Baum Construction Company and Baum

Construction Company, Inc., had an extensive lending history with First

Coleman National Bank (“FCNB”). Baum entered into security agreements with

FCNB covering all of Baum’s assets, including his 392-acre ranch, most of his

personal property, company equipment and vehicles, fixtures, and his livestock,

including twenty-nine specifically identified horses.

Baum defaulted on his loans, and on November 4, 2003, he filed a joint

petition for Chapter 11 bankruptcy with his wife, Linda Baum. On December

15, 2003, the bankruptcy court converted the case to a Chapter 7 proceeding. 

Pursuant to the Bankruptcy Code, the Baums were required to file

schedules of their assets and liabilities and a statement of financial affairs

(“SOFA”). See 11 U.S.C. § 521(a). On January 10, 2004, after a series of delays

and extensions, Baum and his wife filed their schedules and SOFA.1 The Baums

filed amended schedules and SOFAs on January 29, 2004, and May 5, 2004. 

On April 2, 2004, the United States Trustee (“Trustee”) filed a complaint

objecting to the discharge of Baum under 11 U.S.C. § 727(a).2 The Trustee

alleged, inter alia, that Baum fraudulently concealed and transferred property

of the estate in violation of § 727(a)(2), and that Baum knowingly and

fraudulently made a false oath in violation of § 727(a)(4).
No. 06-10620

3

Atthe bankruptcy trial, the Trustee introduced testimony from numerous

witnesses on Baum’s pre- and post-petition transactions. The following are some

of the specific transactions that ultimately led the bankruptcy court to deny

Baum’s discharge under § 727(a).

1. Pre-Petition Transactions

a. Diamond Tennis Bracelet

Several years before the Baums filed for bankruptcy, James Keith Neal,

a friend of Baum’s and the owner of three pawnshops, facilitated Baum’s

purchase of a diamond tennis braceletfrom Ed Aleman for approximately $4000

to $5000. For one reason or another, Linda Baum gave the bracelet to Baum’s

mother, Joan Billings. At the bankruptcy trial, Billings testified that she gave

the bracelet back to Baum in September or October of 2003 when she realized

that the Baums were having financial difficulties. Billings further testified that

she intended for Baum to sellthe bracelet since his family “needed some money.”

In November 2003, the same month that Baum filed for bankruptcy, Baum

contacted Neal about reselling the bracelet. Neal testified that he contacted

Aleman about purchasing the bracelet. Neal stated that after Aleman told him

that he would be interesting in getting the bracelet back, Neal purchased the

bracelet from Baum on behalf of Aleman for approximately $2000 to $3000 in

cash. 

Baum failed to note this transaction on both his schedules and SOFA. At

trial, Dick Harris, an attorney who had attended the first meeting of the

creditors, testified that Baum was asked about the sale of the tennis bracelet at

the meeting. According to Harris, Baum replied that he had sold some jewelry

that had been given to him by relatives but that the jewelry was not his.

b. .45 Colt Pistol

Testimony at trial indicated that Baum sold a .45 Colt pistol to James

Keith Neal at the same time he sold Neal the diamond bracelet. Neal testified
No. 06-10620

4

at trial that in November 2003, he purchased a .45 Colt pistol from Baum for

$500 in cash. While Baum did not dispute that he sold the gun to Neal, Baum

testified that the .45 Colt pistol belonged to his eleven-year-old son. 

Although Baum’s schedules show that he sold two shotguns and a rifle to

James Keith Neal for $600, they do not indicate that Baum sold a .45 Colt

handgun for $500 to Neal in the year before he filed for bankruptcy. In addition,

Baum’s SOFA does not reference any specific firearms that he was purportedly

holding for others, including his son. 

2. Post-Petition Transactions

a. Preifert Portable Arena

On December 16, 2003, the bankruptcy court granted FCNB’s motion for

relief from the stay, which permitted FCNB to collect and foreclose on its

collateral. Agents of FCNB attempted to enter Baum’s property on December

18, 2003, but were refused. After obtaining a writ of sequestration from the

state district court in Coleman County, representatives of FCNB and the

Coleman County sheriff’s office arrived at Baum’s ranch on January 5, 2004, and

seized FCNB’s collateral, including a number of horses and personal property.

On January 5, 2004, FCNB representatives noted the presence of a

Preifert portable arena on the property but did not seize the arena at that time.

FCNB foreclosed on the ranch on January 6, 2004, but failed to take possession

until February 11, 2004. When FCNB representatives arrived on February 11,

2004, they found that the arena was no longer on the property. FCNB later

found the portable arena in the possession of Baum’s friend, John Curtis.

Baum’s original schedules, filed on January 10, 2004, indicate that he was

the owner of the Preifert portable arena. On January 29, 2004, however, Baum

amended his schedules to indicate that his friend, Russell Johnson, owned the

arena. At the bankruptcy trial, Johnson testified that he did not own the arena,

but that Baum had tried to give him the arena sometime in 2003 as payment for
No. 06-10620

3 The bankruptcy court made other findings of fact and conclusions of law concerning

Baum’s pre-petition and post-petition transfer of property. We need not reach these findings,

5

a favor he had performed for Baum. Johnson testified, however, that he declined

Baum’s offer and never took possession or control of the arena. 

In his trial testimony, Baum denied that he removed the arena from his

property. Baum testified, however, that he was aware that his friend, John

Curtis, was going to remove the arena from the ranch, but that he never gave

Curtis permission to do so. Curtis’s deposition testimony contradicted Baum’s

story; Curtis testified that Baum asked him to remove the arena and store it for

Johnson, which he agreed to do. Curtis testified that he later surrendered the

arena to FCNB. 

b. Damaged Guardrails

Mason Cullins, an agent of Pine Street Salvage, testified in his deposition

that on February 20, 2004, which was after FCNB had foreclosed on Baum’s

property, Baum permitted Cullins to enter Baum’s former ranch and remove

damaged guardrails from the property. The Trustee learned of this

unauthorized sale of estate property and intercepted a check from Pine Street

Salvage in the amount of $532.40 for the scrap value of the guardrails. 

Baum’s schedules and SOFA do not list any inventory of used guardrails.

At trial, Baum denied his involvement in this transaction.

B. Procedural History 

On April 5, 2005, the bankruptcy court denied Baum’s discharge under

§ 727(a). The bankruptcy court found that Baum, with the requisite fraudulent

intent, concealed his ownership of and allowed to be transferred post-petition the

portable arena and the damaged guardrails, in violation of § 727(a)(2). The

bankruptcy court also found that Baum knowingly and fraudulently failed to

disclose his pre-petition transfer of the diamond tennis bracelet and the .45 Colt

handgun, in violation of § 727(a)(4).3
No. 06-10620

however, because we conclude that the grounds listed below are more than sufficient to affirm.

6

The district court affirmed the bankruptcy court, concluding that the

bankruptcy court’s findings were not clearly erroneous. Baum now appeals,

disputing the underlying factual findings that the bankruptcy court used in

denying his discharge. Baum also argues that the Trustee failed to prove by a

preponderance of the evidence that he concealed and transferred property postpetition with the requisite fraudulent intent, in violation of § 727(a)(2), or that

he made a false oath with the requisite intent, in violation of § 727(a)(4). This

court has jurisdiction under 28 U.S.C. § 158(d) and § 1291. 

II. STANDARD OF REVIEW

This court applies the same standard of review as the district court when

reviewing the decision of the bankruptcy court. See Nesco Acceptance Corp. v.

Jay (In re Jay), 432 F.3d 323, 325 (5th Cir. 2005). “‘We review the bankruptcy

court’s findings of fact for clear error and its conclusions of law de novo.’”

Robertson v. Dennis (In re Dennis), 330 F.3d 696, 701 (5th Cir. 2003) (quoting

Gamble v. Gamble (In re Gamble), 143 F.3d 223, 225 (5th Cir. 1998)). “A finding

of fact is clearly erroneous only if ‘on the entire evidence, the court is left with

the definite and firm conviction that a mistake has been committed.’”

Id. (quoting Hibernia Nat’l Bank v. Perez (In re Perez), 954 F.2d 1026, 1027 (5th

Cir. 1992)); see Webb v. Reserve Life Ins. Co. (In re Webb), 954 F.2d 1102, 1104

(5th Cir. 1992). Strict application of the clearly erroneous rule is necessary

when, as here,the district court affirmed the bankruptcy court’s findings of fact.

Butler Aviation Int’l, Inc. v. Whyte (In re Fairchild Aircraft Corp.), 6 F.3d 1119,

1128 (5th Cir. 1993). 

In addition, when the bankruptcy court’s findings of fact are based on

determinations regarding the credibility of witnesses, they should be awarded

even greater deference. In re Webb, 954 F.2d at 1106; see FED. R. BANKR.P. 8013
No. 06-10620

7

(“[D]ue regard shall be given to the opportunity of the bankruptcy court to judge

the credibility of the witnesses.”). “We will not attempt to reassess the

credibility of witnesses whom we have not had the opportunity to see on the

stand.” Tex. Mortgage Servs. Corp. v. Guadalupe Sav. & Loan Ass’n (In re Tex.

Mortgage Servs. Corp.), 761 F.2d 1068, 1078 (5th Cir. 1985).

III. DISCUSSION

A. Violations of 11 U.S.C. § 727(a)(2)

The bankruptcy court shall not grant a discharge under Chapter 7 if

the debtor, with intent to hinder, delay, or defraud a creditor or an

officer of the estate charged with custody of property under this

title, has transferred, removed, destroyed, mutilated, or concealed,

or has permitted to be transferred, removed, destroyed, mutilated,

or concealed . . . property of the debtor, within one year before the

date of the filing of the petition; or . . . property of the estate, after

the date of the filing of the petition.

11 U.S.C. § 727(a)(2)(A)-(B). The bankruptcy court’s determination that a debtor

had the requisite intent is a factual finding, which we must review under the

clear error standard. In re Dennis, 330 F.3d at 701. “Actual intent . . . may be

inferred from the actions of the debtor and may be proven by circumstantial

evidence.” Pavy v. Chastant (In re Chastant), 873 F.2d 89, 91 (5th Cir. 1989).

Factors that tend to evidence actual intent to defraud include:

(1)the lack or inadequacy of consideration; (2)the family, friendship

or close associate relationship between the parties; (3) the retention

of possession, benefit or use of the property in question; (4) the

financial condition of the party soughtto be charged both before and

after the transaction in question; (5) the existence or cumulative

effect of the pattern or series of transactions or course of conduct

after the incurring of debt, onset of financial difficulties, or

pendency or threat of suits by creditors; and (6) the general

chronology of the events and transactions under inquiry.

Id. (quoting Fox v. Schmit (In re Schmit), 71 B.R. 587, 590 (Bankr. D. Minn.

1987)). 
No. 06-10620

8

After reviewing the record, we conclude that the bankruptcy court did not

err in denying Baum’s discharge under § 727(a)(2). The evidence before the

bankruptcy court indicated that Baum owned the portable arena, that Baum

attempted to conceal his ownership of the arena by claiming that it belonged to

Russell Johnson, that Baum asked and permitted John Curtis to remove the

arena after he filed for bankruptcy, and that Baum committed these actions with

the requisite fraudulent intent. Although Baum maintains that he gave the

arena to Russell Johnson, the bankruptcy court found Johnson’s and Curtis’s

testimony, which refuted Baum’s story, more credible than that of Baum. As

stated above, we give great deference to the bankruptcy court’s findings of fact

that are based on determinations regarding the credibility of witnesses. See In

re Webb, 954 F.2d at 1106. Because Baum has not shown error, clear or

otherwise, we will not reverse the bankruptcy court’s findings and conclusions

of law regarding the portable arena.

We reach the same conclusion on the damaged guardrails. There was

sufficient evidence before the bankruptcy court that Baum allowed the postpetition removal of damaged guardrails with the intent to defraud his creditors

or the estate. The damaged guardrails became property of the estate once the

Baums filed for bankruptcy. The bankruptcy court found that Baum’s failure to

consult with the Trustee or any other party in interest before disposing of the

guardrails evidenced Baum’s intent to hinder, delay, and defraud creditors and

the estate. On appeal, Baum has failed to show that these findings and

conclusions were in error. Accordingly, we affirm.

B. Violations of 11 U.S.C. § 727(a)(4)

Alternatively, we conclude that there was sufficient evidence to bar

Baum’s discharge under § 727(a)(4). Under that section, the bankruptcy court

shall not grantthe debtor a discharge if “the debtor knowingly and fraudulently,

or in connection with the case . . . made a false oath or account.” 11 U.S.C.
No. 06-10620

9

§ 727(a)(4)(A). Stated differently, the debtor’s discharge may be denied if the

debtor makes a false oath in connection with his bankruptcy filings. Cadle Co.

v. Pratt (In re Pratt), 411 F.3d 561, 566 (5th Cir. 2005). “An omission of an asset

can constitute a false oath.” Id.

Based on our review of the record, the bankruptcy court did not err in

finding that Baum sold a diamond tennis bracelet and a .45 Colt pistol in the

year before he filed for bankruptcy and did not report these transactions on his

schedules or SOFA. The record evidence shows that Baum knowingly and

fraudulently failed to disclose the sale of these items on his schedules or SOFA.

Although Baum argues that he was not the owner of either item, the evidence

indicates otherwise. Moreover, to the extent the bankruptcy court credited other

witnesses’ testimony over Baum’s in concluding that Baum in fact owned these

items, we will not disturb the bankruptcy court’s credibility determinations on

appeal. See In re Tex. Mortgage Servs. Corp., 761 F.2d at 1078. Accordingly,

Baum’s failure to disclose the sale of the bracelet and the .45 Colt handgun on

his schedules and SOFA resulted in him making a false oath in violation of

§ 727(a)(4). Cf. In re Pratt, 411 F.3d at 566.

Because any of the grounds we have addressed here are more than

sufficient to affirm the judgment, we do not find it necessary to discuss each

alleged point of error raised by Baum. Consequently, we affirm. 

IV. CONCLUSION

For the reasons stated above, the judgment is AFFIRMED.