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IN THE UNITED STATES BANKRUPTCY COURT 

FOR THE NORTHERN DISTRICT OF TEXAS 

AMARILLO DIVISION 

In re: 

WILLIAM BRYAN BARTON, 

 Debtor. 

_____________________________ 

KENT DAVID RIES, Trustee in 

Bankruptcy of William Bryan Barton, 

 Plaintiff, 

v. 

BARTON 5 FAMILY, L.P., 

 Defendant. 

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Case No.: 22-20196-rlj7 

 

Adversary No. 23-02002 

MEMORANDUM OPINION 

On June 9, 2023, the chapter 7 trustee, Kent Ries (Trustee), filed a Notice of Removal 

thereby removing this lawsuit then-pending in the Potter County, Texas Court at Law, styled 

Amarillo National Bank v. William Bryan Barton and Barton 5 Family, L.P., to this Court. In 

response, Barton and Barton 5 bring three motions: a motion to remand or abstain, a motion to 

United States Bankruptcy Judge

Signed December 5, 2023

______________________________________________________________________

The following constitutes the ruling of the court and has the force and effect therein described.

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dismiss the action, and a misguided motion for contempt and sanctions. For the reasons stated 

below, the Court denies all relief requested by Barton and Barton 5. 

I. 

The removed action is a suit filed by Amarillo National Bank against William Bryan 

Barton (Barton), the chapter 7 debtor in the underlying bankruptcy case, and Barton 5 Family, 

L.P. (Barton 5) to recover Barton’s interest in Swing Hard Ventures, LLC that was allegedly 

fraudulently transferred by Barton to Barton 5. The bank had obtained judgments against Barton 

in August and September of 2020 in an aggregate amount of over $8 million.1 Amarillo National 

Bank’s suit on the transfer was filed in Potter County on December 11, 2020. The transfer 

allegedly occurred in early February 2018. The bank’s action to set aside the transfer and 

recover the interest (or its value) is brought under the Texas Uniform Fraudulent Transfer Act, 

commonly referred to as “TUFTA.” 

II. 

Barton filed his chapter 7 bankruptcy case on October 24, 2022. His filing created a 

bankruptcy estate consisting of all his legal or equitable interests in property. 11 U.S.C. 

§ 541(a)(1).2

 Ries, as Trustee, removed the action as representative of Barton’s bankruptcy 

estate and thus then standing in Barton’s shoes as defendant in the action. 

Since the removal, Ries, again as Trustee, formally intervened as plaintiff in the action 

and, under § 544(b) of the Bankruptcy Code, assumed the position of Amarillo National Bank, 

the plaintiff in the state court action. Ries now stands as plaintiff on the TUFTA claim.3

 In 

1

 The judgment entered on August 18, 2020 was in the amount of $814,268.26, and the judgment entered on 

September 8, 2020 was $7,374,090.92. Case No. 22-20196, Claim No. 5-1. As of the petition date, the balances on 

the judgments were $1,080,715.10 and $6,812,930.67, respectively, for a total claim of $7,893,645.77. Id. 2

 Hereinafter, “section” or “§” refers to 11 U.S.C., the Bankruptcy Code, unless otherwise stated. 

3

 This case creates the curious circumstance of a bankruptcy trustee removing a state court suit for the debtor as 

a defendant for the purpose of prosecuting the same action for the plaintiff as a creditor of the debtor. Outside of 

bankruptcy, a creditor brings a fraudulent transfer action to recover property or its value. Such recovery benefits that

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addition, in July 2023, Ries filed Plaintiff’s Second Amended Complaint that dropped Barton as 

a defendant. 

III. 

By their motions, Barton and Barton 5 raise a raft of issues. They contend that Ries, 

Trustee, is not a party in the action and thus has no standing; that as an action removed by a nonparty, it cannot be within the Court’s jurisdiction; that the action is barred by the statute of 

limitations (or the state-law-based statute of repose); and that removal was improper because a 

trustee can only stand in the shoes of a hypothetical unsecured creditor (and thus not a real

creditor as Amarillo National Bank is here). As a result of these alleged deficiencies, Barton and 

Barton 5 say the Court must dismiss the action for lack of jurisdiction. If not that, then it should 

remand the action (or abstain from hearing it) back to state court. 

Barton makes a more nuanced argument as well. Barton says that given his receipt of a 

discharge in his bankruptcy case, Ries, as Trustee standing in the role of Amarillo National Bank 

as plaintiff, cannot prosecute a TUFTA fraudulent transfer action on a discharged debt, the debt 

that was held by Amarillo National Bank. Barton’s bankruptcy discharge was issued March 7, 

2023. Barton says that the continued pursuit of this action violates the discharge injunction, 

constitutes contempt, and warrants an award of damages, including punitive damages, and 

attorneys’ fees. This is despite the conferrence of such action to the Trustee under § 544(b) of 

the Bankruptcy Code. 

IV. 

The Court rejects Barton and Barton 5’s arguments. 

creditor. In a chapter 7 bankruptcy case, only the chapter 7 trustee can bring an action to recover property the debtor 

fraudulently transferred. Any recovery, however, benefits the bankruptcy estate and thus all creditors. This serves 

the bankruptcy policy of providing a fair and equitable distribution to all similarly situated creditors. Section 544 is 

one of the avoidance powers granted to bankruptcy trustees.

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First, Ries, as the chapter 7 Trustee, removed the action as a party defendant. The 

chapter 7 Trustee is the representative of the bankruptcy estate that was created upon Barton’s 

chapter 7 filing and, as such, has the capacity to sue and be sued. § 323(a), (b) and § 541(a). 

See Fed. R. Bankr. P. 6009; Moses v. Howard Univ. Hosp., 606 F.3d 789, 795 (D.C. Cir. 2010) 

(“The commencement of Chapter 7 bankruptcy extinguishes a debtor’s legal rights and interests 

in any pending litigation, and transfers those rights to the trustee, acting on behalf of the 

bankruptcy estate.”). 

Ries perhaps created confusion by stating in his Notice of Removal that the removed 

action is based on TUFTA but “may only be pursued by the Trustee under ... § 548” of the 

Bankruptcy Code, the Code’s version of a cause of action for a fraudulent transfer. ECF No. 1.4

 

From the date of the alleged transfer, February 1, 2018, to the date of Barton’s chapter 7 filing is 

well outside the two-year limitations period for the chapter 7 trustee to bring an action under 

§ 548. See 11 U.S.C. § 548(a)(1). Trustee’s counsel, at argument, said the reference to § 548 

was a mistake. Regardless, both from the Notice of Removal and the briefing in support of each 

party’s arguments, it is clear that the Trustee seeks avoidance of the alleged transfer under 

§ 544(b)(1) of the Code, which provision allows the Trustee to avoid a transfer by the debtor that 

is voidable “under applicable law by a creditor holding an unsecured claim” against the debtor. 

11 U.S.C. § 544(b)(1). 

Second, as an action to recover an alleged fraudulent transfer, the removed cause is a 

“core” matter over which the Court holds jurisdiction to hear and decide the action. See 28 

U.S.C. § 157(b)(2)(H) and 11 U.S.C. § 544(b)(1). 

Third, by invoking § 544(b)(1), the Trustee succeeds to the rights of Amarillo National 

4

 “ECF No.” refers to the numbered docket entry in the Court’s electronic case file for Adversary No. 23-02002. 

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Bank. Cadle Co. v. Mims (In re Moore), 608 F.3d 253, 260 (5th Cir. 2010) (“If an actual, 

unsecured creditor can, on the date of the bankruptcy, reach property that the debtor has 

transferred to a third party, the trustee may use § 544(b) to step into the shoes of that 

creditor....”). The transfer was allegedly made on February 1, 2018; the bank filed its TUFTA 

cause on December 11, 2020, well within the four-year limitation period under TUFTA. Tex. 

Bus. & Com. Code § 24.010. 

Fourth, the statute does not require that the creditor be “hypothetical.” “The burden is on 

the trustee ... to demonstrate the existence of an actual creditor with an allowable claim against 

the debtor.” 5 COLLIER ON BANKRUPTCY ¶ 544.06 (16th 2023). 

Fifth, as Barton 5 points out, TUFTA’s avoidance provisions apply to creditors who hold 

a claim, and a claim is defined as “a right to payment....”5

 Tex. Bus. & Com. Code §§ 24.005, 

24.006, and 24.002(4) & (3). Barton 5, looking to § 524(a)(2) of the Bankruptcy Code, then says 

that because Barton received a discharge of the underlying creditor’s debt,6

 no claim (or right to 

payment) exists to support the Trustee’s continuation of the TUFTA action. But this reasoning 

fails to account for the definition of a claim—“right to payment”—under TUFTA and the effect 

of a discharge in bankruptcy. Under § 524 of the Bankruptcy Code, the debtor’s discharge 

prevents recovery against the debtor of any discharged debt as a “personal liability of the 

debtor.” § 524(a)(2). Further, the Code “ensures that a discharge will be completely effective 

and will operate as an injunction against the commencement or continuation of an action or the 

employment of process to collect or recover a debt as a personal liability of the debtor.” 4 

5

 The entire definition of “claim” specifies that a claim is “a right to payment or property, whether or not the right 

is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, 

equitable, secured, or unsecured.” Tex. Bus. & Com. Code § 24.002(3). 6

 The underlying case, In re William Bryan Barton, is a chapter 7 case, and Barton received his discharge under 

§ 727. Case No. 22-20196. 

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COLLIER ON BANKRUPTCY ¶ 524.02 (16th 2023) (emphasis added); see 11 U.S.C. § 524(a). The 

discharge is focused on the debtor’s personal liability on a debt, which the Code defines as a 

“liability on a claim.” 11 U.S.C. § 101(12). And, like TUFTA, the Code defines a claim as a 

“right to payment....” 11 U.S.C. § 101(5)(A). These provisions, read together, draw the 

distinction between a discharge of the debtor’s personal liability and the creditor’s right to 

payment. The discharge relieves the debtor’s obligation to pay and the creditor’s ability to 

enforce the debt as opposed to the creditor’s right to payment on its claim. This is not a novel 

point. Courts consistently acknowledge that a discharge does not extinguish a debt.7 The bottom 

line is that “while the creditor may not enforce her claim as it existed pre[discharge], the claim 

nevertheless continues to exist.” Rountree v. Nunnery (In re Rountree), 448 B.R. 389, 411 

(Bankr. E.D. Va. 2011) (alterations in original) (quoting United States v. Conston, Inc. (In re 

Conston, Inc.), 181 B.R. 769, 773 (D. Del. 1995)). 

 Limiting the creditors’ claims to a “right to payment” underscores other, broader policybased concepts imposed in bankruptcy. The Code does not prevent a debtor from voluntarily 

repaying any debt. 11 U.S.C. § 524(f). The discharge does not affect the liability of nondebtors 

for such debt. 11 U.S.C. § 524(e). And of immediate concern are chapter 7 cases like here: 

where the trustee, standing in the shoes of a creditor, attempts to avoid a transfer as fraudulent 

when the debtor was discharged of his debt to that creditor. Barton was granted his discharge 

less than five months after his case was filed. Expecting the Trustee to object to the discharge (as 

Barton 5’s position requires) would lead to unfortunate consequences including unnecessary, 

7 See Johnson v. Home State Bank, 501 U.S. 78, 84, 111 S. Ct. 2150 (1991) (“[A] bankruptcy discharge 

extinguishes only one mode of enforcing a claim—namely, an action against the debtor in personam—while leaving 

intact another—namely, an action against the debtor in rem.”); In re Sandy Ridge Dev. Corp., 881 F.2d 1346, 1351 

(5th Cir. 1989) (“A discharge in bankruptcy will simply not affect the liability of a guarantor.”); Rountree v. Nunnery 

(In re Rountree), 448 B.R. 389, 410–12 (Bankr. E.D. Va. 2011) (citing cases standing for the proposition that discharge 

does not extinguish a debt).

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premature, and frivolous objections to discharge and avoidance actions. It’s unclear on what 

grounds a trustee could, in good-faith, object to a debtor’s discharge if it is for the sole purpose 

of later pursuing a fraudulent transfer action. See § 727 (listing the circumstances for which a 

discharge will not be granted, and the circumstances where a debtor’s discharge may be 

revoked). Last, Barton 5’s construction is also wholly inconsistent with the Code’s stated 

limitations periods for the trustee’s chapter 5 avoiding powers (§§ 544, 545, 547, 548) under 

which, in the vast majority of chapter 7 cases, run well beyond when the debtor receives his 

discharge. See 11 U.S.C. § 546.8

V. 

 The bankruptcy discharge does not eliminate creditors’ claims in cases where discharge 

occurs before the chapter 7 trustee’s final distribution. Individual debtors surrender their nonexempt assets in return for the relief provided by the discharge. Distributions to creditors are 

typically made after the discharge is granted. A creditor’s right to payment survives the 

discharge. 

 The Court will issue its order denying all relief requested by Barton and Barton 5’s 

motions. 

### End of Memorandum Opinion ### 

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 Section 546 requires careful reading—“may not be commenced after the earlier of ... the later of”—but reveals 

the limitations period typically runs one-plus to two years after the case filing. 

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