NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_________________

No. 23-1294

_________________

IN RE: DARYL R. ROTHMUND

JENZACK PARTNERS, LLC

v.

DARYL R. ROTHMUND,

Appellant

 ________________

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. Civil No. 2-21-cv-04064)

District Judge: Honorable Jeffrey L. Schmehl

________________

Submitted Under Third Circuit L.A.R. 34.1(a)

November 9, 2023

Before: KRAUSE, FREEMAN, and MONTGOMERY-REEVES, Circuit Judges.

(Opinion filed February 15, 2024) 

______________

OPINION*

______________

*

 This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not 

constitute binding precedent. 
2

MONTGOMERY-REEVES, Circuit Judge.

In this appeal, Daryl Rothmund challenges the Bankruptcy Court’s order that 

granted Jenzack Partners, LLC’s summary judgment motion requesting revocation of 

Rothmund’s Chapter 7 discharge. Section 727(d)(1) of the United States Bankruptcy 

Code requires that the Bankruptcy Court revoke the discharge of a debtor who obtained 

that discharge through fraud, but only if the requesting party proves that it did not know 

of the fraud until after the debtor received that discharge. See 11 U.S.C. § 727(d)(1). 

The Bankruptcy Court erred, Rothmund argues, by holding that the undisputed facts 

showed Jenzack lacked predischarge knowledge of Rothmund’s alleged fraud. Because

Rothmund fails to point to evidence sufficient to create a genuine dispute of material fact

about Jenzack’s predischarge knowledge, we will affirm.

I. BACKGROUND

On April 2, 2018, Rothmund filed for bankruptcy under Chapter 7 of the United 

States Bankruptcy Code. In the years before Rothmund’s bankruptcy filing, Jenzack had 

been seeking to execute an assigned judgment against Rothmund and several entities in 

which he held an interest, including the following Pennsylvania corporations: Automatic 

Empire, LLC (“AE”), International Building Management Group, LLC (“IBMG”), and 

International Building Group, LLC (“IBG”). 

On December 9, 2014, in aid of executing Jenzack’s judgment against Rothmund, 

the Philadelphia County Court of Common Pleas entered an order charging Rothmund’s 

interest in AE, among other companies (the “First Charging Order”). The First Charging 

Order appointed Jenzack’s counsel as the receiver and authorized Jenzack, or its counsel, 
3 

to make inquiries into the profits, distributions, and money due, or to fall due, to 

Rothmund involving AE. On March 23, 2018, the Court of Common Pleas entered a 

second charging order, which charged Rothmund’s interest in IBMG and IBG (the 

“Second Charging Order”). 

Roughly two weeks after the Court of Common Pleas entered the Second 

Charging Order, Rothmund filed for bankruptcy. On June 5, 2018, Jenzack filed a 

motion under Federal Bankruptcy Rule 2004 seeking to examine Rothmund under oath 

and require that he produce certain financial documents (the “2004 Motion”).

1

 Then, on 

July 12, 2018, with the 2004 Motion still pending, the Bankruptcy Court granted

Rothmund a discharge. 

On July 25, 2018, the Bankruptcy Court granted the 2004 Motion, and on 

September 6, 2018, Jenzack examined Rothmund. On July 10, 2019, Jenzack initiated an 

adversary proceeding against Rothmund seeking revocation of his discharge under § 727 

of the Bankruptcy Code. Jenzack alleged that Rothmund provided false information to 

the Chapter 7 Trustee and Bankruptcy Court, failed to disclose assets, and concealed the 

truth about his finances to avoid his obligations to pay creditors. Thereafter, Jenzack 

obtained documents that AE produced to a third party in an unrelated litigation. These 

1

 Federal Rule of Bankruptcy Procedure 2004 is “the basic discovery device in 

bankruptcy cases. It allows examination of any entity on a motion filed with the court 

pursuant to Rule 2004(a).” 9 Collier on Bankruptcy ¶ 2004.01 (16th ed. 2023); see also

Fed. R. Bankr. P. 2004(a).
4

documents revealed an outstanding receivable that AE owed to IBG for $480,306.71 (the 

“AE Receivable”). 

On November 27, 2019, Rothmund filed a mechanics’ lien on behalf of IBG for 

$1,085,964.89 (the “Mechanics’ Lien”). Attached to the Mechanics’ Lien was a prepetition contract between IBG and Quad-Two Partnership for a real estate development

project, known as Fitler Nine. Also attached was a verification signed by Rothmund, 

under penalty of perjury, stating that IBG provided supplies to Quad-Two as recently as 

June 10, 2019. 

On December 24, 2020, Jenzack moved for summary judgment, arguing that 

Rothmund concealed his assets and income to evade execution of Jenzack’s judgment

and his obligation to pay creditors. Rothmund opposed Jenzack’s motion on the ground 

that § 727(d)(1) barred Jenzack’s request for revocation because Jenzack knew about the

alleged fraud predischarge. 11 U.S.C. § 727(d)(1). 

The Bankruptcy Court agreed with Jenzack and granted its motion for summary 

judgment. In its ruling, the Bankruptcy Court relied on the undisputed fact that 

Rothmund failed to disclose two known assets—payments owed to IBG under a prepetition contract for services performed as recently as June 2019 and the AE 

Receivable—which, together, totaled almost $1.6 million and would have otherwise been 

available for distribution to creditors.2

 Furthermore, the Bankruptcy Court held that 

2

 Rothmund’s current ownership interests in IBG, IBMG, and AE are unknown, but his

affidavit and schedules indicate that he owns a 100% interest in IBG and IBMG and a 

50% interest in AE. 
5

Jenzack could not have known of Rothmund’s alleged fraud because the information only 

became available to Jenzack post-discharge. Rothmund appealed the Bankruptcy Court’s 

order to the District Court. 

The District Court held that Rothmund failed to “create an issue of material fact” 

regarding Jenzack’s predischarge knowledge and affirmed the Bankruptcy Court’s 

summary judgment order. Rothmund then timely filed this appeal. 

II. DISCUSSION3

To resolve this appeal, we must determine (1) the issues properly preserved for 

appeal and (2) whether Rothmund pointed to sufficient evidence to create a genuine 

dispute of material fact about Jenzack’s knowledge of the alleged fraud for purposes of 

revocation under § 727(d)(1). We address each question in turn.

A. Preservation of Issues

In his opening brief, Rothmund lists 11 issues presented. Jenzack responds that

Rothmund raised only one issue before the Bankruptcy Court—Jenzack’s predischarge

knowledge. Thus, Jenzack argues that Rothmund cannot raise any other issues for the 

first time on appeal. We agree with Jenzack.

Third Circuit precedent establishes “that arguments raised for the first time on 

appeal are not properly preserved for appellate review.” Simko v. U.S. Steel Corp, 992 

3 We have jurisdiction under 28 U.S.C. §§ 158(d) and 1291. The District Court had 

jurisdiction under 28 U.S.C. § 158(a). The Bankruptcy Court had jurisdiction under 28 

U.S.C. § 1334(b). We review the decision to grant summary judgment de novo. See Idea 

Boardwalk, LLC v. Revel Ent. Grp. (In re Revel AC Inc.), 909 F.3d 597, 601 (3d Cir. 

2018). 
6 

F.3d 198, 205 (3d Cir. 2021) (collecting cases). Rothmund’s brief in opposition to 

summary judgment and oral argument to the Bankruptcy Court show that he only raised 

arguments about Jenzack’s predischarge knowledge. For example, Rothmund’s brief has 

only one section presenting arguments on why the District Court should deny Jenzack’s 

motion for summary judgment. That section is titled, “Debtor’s Discharge Should Not be 

Revoked Pursuant to 11 U.S.C. § 727(d).” App. 2066. And the succinct summation of 

that section states, “[T]he Creditor has not met its burden to prove the second required 

element[4

] when granting a § 727(d) revocation . . . . Therefore, it has also not met its 

burden to prove there is no dispute of material facts so its motion for summary judgment 

in this case should also be rejected.” App. 2070 (emphasis added). Similarly, during oral 

argument, Rothmund stated, “Your Honor, the issue in dispute is whether the plaintiff did 

know or not know something. That’s the issue in dispute simply put.” App. 2105. Thus, 

we will only consider Rothmund’s arguments about Jenzack’s predischarge knowledge.

5

 

4

 The second required element is that “the requesting party did not know of such fraud 

until after the granting of such discharge.” 11 U.S.C. § 727(d)(1). 

5

 Jenzack argues that Rothmund’s failure to raise the remaining arguments before the 

Bankruptcy Court constitutes a waiver. As explained above, we agree that Rothmund 

failed to properly preserve arguments other than those regarding Jenzack’s predischarge 

knowledge. We need not decide, however, the proper characterization of Rothmund’s 

failure to preserve the remaining arguments because Rothmund does not respond to

Jenzack’s waiver argument at all. Barna v. Bd. of Sch. Dirs. of the Panther Valley Sch. 

Dist., 877 F.3d 136, 146–47 n.7 (3d Cir. 2017) (distinguishing “waiver” from “forfeiture” 

and explaining that the distinction between the two carries “great significance” because 

an appellate court will not reach waived arguments, but we may “resurrect” forfeited 

arguments in “narrow exceptional circumstances”).
7

Having established the proper scope of Rothmund’s appeal, we now turn to 

whether Jenzack possessed predischarge knowledge of the alleged fraud such that it may 

not obtain revocation under § 727(d)(1). 

B. Knowledge of the Alleged Fraud

Section 727(d)(1) of the Bankruptcy Code provides that “[o]n request of the 

trustee, a creditor, or the United States trustee, . . . the court shall revoke a discharge” if 

(1) “such discharge was obtained through the fraud of the debtor,” and (2) “the requesting 

party did not know of such fraud until after the granting of such discharge.” 11 U.S.C. 

§ 727(d)(1) (emphasis added). Although neither party directly addresses it, there is a split 

among the courts (bankruptcy and appellate) about the meaning of “did not know” under 

§ 727(d)(1) of the Bankruptcy Code. On the one hand, most courts have adopted a

constructive knowledge standard. Under this standard, a creditor is deemed to know

about the alleged fraud if the creditor knew facts, predischarge, that put it on notice of 

possible fraud, and the burden is on the creditor to investigate suspicions of fraud before 

discharge. See, e.g., Mid-Tech Consulting, Inc. v. Swendra, 938 F.2d 885, 887–88 (8th 

Cir. 1991).6

 On the other hand, a few courts have held that a creditor must have actual 

6 See also Lancioni v. Faragasso (In re Faragasso), No. 16-34107, 2017 Bankr. LEXIS 

2200, at *10 (Bankr. D.N.J. Aug. 4, 2017) (explaining that “the policy in favor of a fresh 

start suggests that a creditor should diligently investigate potential fraud once the creditor 

learns of facts indicating a fraud”); Anderson v. Vereen (In re Vereen), 219 B.R. 691, 

695–97 (Bankr. D.S.C. 1997) (holding that a trustee seeking revocation of a debtor’s 

discharge knew of the alleged fraud predischarge because, among other things, the 

trustee’s “questions and actions throughout his investigations indicate an advanced state 

of knowledge and indicate at the least, that he was very suspicious [predischarge] that the 

Debtor had committed fraud”) (relying on Cont’l Builders v. McElmurry (In re 

McElmurry), 23 B.R. 533, 536 (W.D. Mo. 1982) (rejecting a creditor’s argument that it 
8

knowledge to bar revocation.7 That is, a creditor must know—predischarge—all the 

relevant facts that constitute the alleged fraud. See, e.g., MacDill Air Force Base Fed. 

Credit Union v. Schweda (In re Schweda), 19 B.R. 499, 501 (Bankr. M.D. Fla. 1982) 

(rejecting the debtor’s argument that a creditor’s knowledge of a transaction later deemed

fraudulent equates to knowledge under § 727(d)(1) because “it was only when all 

relevant events became known that the fraudulent scheme became evident”). Regardless 

of the applicable knowledge standard, if a court determines that a creditor possessed

knowledge of the alleged fraud, § 727(d)(1) bars revocation. See, e.g., Anderson v. Poole

(In re Poole), 177 B.R. 235, 242 (Bankr. E.D. Pa. 1995) (explaining “where the 

requesting party fails to sustain its burden of proving that it lacked knowledge of the 

fraud prior to the granting of the discharge, the cause of action should be denied” 

(cleaned up)).

lacked knowledge of the debtor’s alleged fraud because the creditor admitted that it 

suspected fraud based on the debtor’s “evasive tactics”)); Staten Island Sav. Bank v. 

Scarpinito (In re Scarpinito), 196 B.R. 257, 267 (Bankr. E.D.N.Y. 1996) (relying on a 

creditor’s discovery requests and filing of a state court action to support a possible 

finding that the creditor possessed “suspicions or even actual knowledge” about the 

debtor’s alleged fraud); Lewis v. Cook (In re Cook), No. 09-25681-JAD, 2012 WL 

1073239, at *1, *3–4 (Bankr. W.D. Pa. Mar. 29, 2012); Dobin v. Lawrence (In re 

Lawrence), No. 11-1430, 2012 WL 71601, at *1, *5 (Bankr. D.N.J. Jan. 10, 2012)

(same); Sayal v. Faruque (In re Faruque), No. 09-1035, 2009 WL 2211210, at *1, *5–6

(Bankr. E.D. Va. July 20, 2009); Buckeye Ret. Co. v. Heil (In re Heil), 289 B.R. 897, 

902–03 (Bankr. E.D. Tenn. 2003); Govaert v. Topper (In re Topper), 85 B.R. 167, 169 

(Bankr. S.D. Fla. 1988).

7 See, e.g., Ross v. Mitchell (In re Dietz), 914 F.2d 161, 164 (9th Cir. 1990) (affirming 

revocation when a trustee possessed facts relevant to the existence of fraud before 

discharge, but only learned of the fraud after discharge). 
9

We have not defined “did not know” for purposes of revocation under § 727(d)(1) 

of the Bankruptcy Code. And despite the lack of precedential authority, neither party 

argues for one knowledge standard over the other. But we need not interpret the meaning 

of “did not know” to resolve this appeal because Rothmund has failed, even under the 

more lenient standard, to identify evidence that would create a genuine dispute of 

material fact about Jenzack’s predischarge knowledge.

The Bankruptcy Court granted summary judgment for Jenzack because of fraud 

relating to (1) the Mechanics’ Lien and (2) the AE Receivable. The Bankruptcy Court 

held that Jenzack could not have known about the Mechanics’ Lien or the AE Receivable

predischarge. Rothmund argues that the Bankruptcy Court erred in determining that 

Jenzack lacked knowledge as to both instances of fraud. We disagree with Rothmund.

1. The Mechanics’ Lien

Rothmund argues that before discharge, Jenzack possessed all the information that 

it needed to discover any alleged fraud regarding the Mechanics’ Lien. According to 

Rothmund, Jenzack’s years-long collection efforts, the investigative power that the First 

Charging Order granted, and the language that Jenzack used in the 2004 Motion prove 

that Jenzack knew or could have learned of Rothmund’s alleged fraud predischarge. 

But the First Charging Order did not include IBG—the company on whose behalf 

Rothmund filed the Mechanics’ Lien. And during the bankruptcy proceeding, Rothmund 

represented that IBG was no longer operating and that all IBG’s bank accounts were 

closed. App. 2126. Rothmund also filed the Mechanics’ Lien, on behalf of IBG, over a 

year after receiving his discharge. Attachments to the Mechanics’ Lien, which stated that 
10

IBG last performed services under the pre-petition contract as recently as June 2019,

included (1) a pre-petition contract and (2) a verification signed by Rothmund, under 

penalty of perjury, that he could assert the lien on behalf of IBG. Rothmund does not 

argue that he provided this information to Jenzack at any time, and Rothmund does not 

provide any reasonable explanation of what would have put Jenzack on notice of the facts 

underlying the Mechanics’ Lien or how Jenzack could have learned this information. 

Thus, Rothmund has failed to point to evidence sufficient to create a genuine dispute 

of material fact about Jenzack’s predischarge knowledge of the Mechanics’ Lien. 

2. The AE Receivable 

Rothmund also argues that Jenzack’s collection efforts, the investigative power 

given under the First Charging Order, and the language used in Jenzack’s 2004 Motion 

prove that Jenzack knew or could have learned of Rothmund’s alleged fraud regarding

the AE Receivable. 

Jenzack made multiple requests for AE’s financial documents before and after 

discharge, and Rothmund produced documents regarding AE to Jenzack before and after 

discharge. Rothmund does not argue that Jenzack failed to request documents likely to 

include information regarding the AE receivables. Rothmund does not argue that he 

produced or disclosed the AE Receivable to Jenzack, despite Jenzack’s multiple requests 

for financial documents from AE. And Rothmund points to no evidence to suggest that

Jenzack discovered the AE Receivable before obtaining the documents through an 

unrelated litigation, post-discharge. 
11 

Thus, Rothmund has failed to point to evidence sufficient to create a genuine dispute 

of material fact about Jenzack’s predischarge knowledge of the AE Receivable.

III. CONCLUSION

For these reasons, we will affirm the Bankruptcy Court’s judgment.