NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

In re: GREGORY JULES LORBER, 

Debtor, 

______________________________ 

GREGORY JULES LORBER, 

Appellant, 

 v. 

FTC COMMERCIAL CORP., a California 

corporation, 

Appellee.

No. 15-56771 

D.C. No. 2:15-cv-04852-MMM 

MEMORANDUM*

In re: GREGORY JULES LORBER, 

Debtor, 

______________________________ 

FTC COMMERCIAL CORP., a California 

corporation, 

Appellant, 

 v. 

GREGORY JULES LORBER, 

No. 15-56831 

D.C. No. 2:15-cv-04852-MMM 

 

* This disposition is not appropriate for publication and is not precedent 

except as provided by Ninth Circuit Rule 36-3.

FILED

MAY 15 2017

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS
2 

Appellee.

Appeal from the United States District Court

for the Central District of California

Margaret M. Morrow, District Judge, Presiding

Submitted May 11, 2017**

Pasadena, California

Before: PREGERSON and FRIEDLAND, Circuit Judges, and DONATO,***

District Judge.

Gregory Lorber appeals the district court’s affirmance of the bankruptcy 

court’s judgment. Pursuant to 11 U.S.C. § 727(a)(3), the bankruptcy court denied 

Lorber discharge of a debt owed to FTC Commercial Corporation (“FTC”) after 

the court found that Lorber failed to maintain adequate business records from 

which his financial condition could be ascertained.1 We have jurisdiction under 28 

U.S.C. § 1291, and we affirm.

 

** The panel unanimously concludes this case is suitable for decision 

without oral argument. See Fed. R. App. P. 34(a)(2).

*** The Honorable James Donato, United States District Judge for the 

Northern District of California, sitting by designation.

1 The bankruptcy court also deemed the debt non-dischargeable under 11 U.S.C. 

§ 523(a)(2)(A) and found that Lorber had failed to explain satisfactorily a loss of 

assets, warranting denial of discharge under 11 U.S.C. § 727(a)(5). Because we 

hold that denial of discharge under § 727(a)(3) was proper, we need not address 

those conclusions or the arguments about § 727(a)(5) raised in FTC’s cross-appeal. 
3 

1. The bankruptcy court did not err in concluding that Lorber’s discharge 

should be denied. A debtor is not eligible for discharge if he “has . . . failed to 

keep or preserve any recorded information, including books, documents, records, 

and papers, from which the debtor’s financial condition or business transactions 

might be ascertained, unless such act or failure to act was justified under all of the 

circumstances of the case.” 11 U.S.C. § 727(a)(3). The party objecting to 

discharge bears the initial burden of proving that discharge should be denied. In re 

Retz, 606 F.3d 1189, 1196 (9th Cir. 2010). But once a creditor has shown that 

inadequate records make it impossible to ascertain a debtor’s financial condition, 

“the burden of proof then shifts to the debtor to justify the inadequacy . . . of the 

records.” In re Caneva, 550 F.3d 755, 761 (9th Cir. 2008) (quoting In re Cox, 41 

F.3d 1294, 1296 (9th Cir. 1994)). 

After a four-day bench trial, the bankruptcy court determined that FTC, the 

creditor, had satisfied its burden by showing that Lorber, the debtor, failed to 

produce electronically stored financial records for several entities he owned and 

operated, creating uncertainty as to their solvency and, thus, his personal financial 

condition. Lorber offered contradictory explanations for that omission, and the 

bankruptcy court found him not credible. Moreover, witnesses presented 

conflicting accounts of the record-keeping practices at Lorber’s businesses, and he 

himself testified inconsistently about how financial information had been 
4 

maintained, what data remained accessible, and whether he even knew where the 

relevant records were. In light of the evidence adduced at trial, it was not illogical 

or implausible for the bankruptcy court to conclude that Lorber had failed to 

maintain sufficient records of his business transactions to be eligible for discharge. 

See Retz, 606 F.3d at 1196 (stating that the bankruptcy court’s factual findings are

reviewed for clear error and reversible only if “illogical, implausible, or without 

support in the record”). 

2. Lorber does not seriously challenge the bankruptcy court’s findings. 

Instead, Lorber contends that, notwithstanding the unaccounted for electronic 

records, the bankruptcy court could have ascertained Lorber’s financial condition 

from other documents produced in discovery. The record does not support that 

claim, which is further undermined by Lorber’s admission that he himself did not 

know where all the financial records were. To the extent Lorber focuses on the 

“sheer volume” of documents involved in this litigation, he misapprehends the 

relevant burdens. Lorber had an “affirmative duty” under § 727(a)(3) to keep and 

preserve records of his business affairs; he cannot evade that obligation by shifting 

responsibility to his creditors and the courts to glean whatever might be learned 

from thousands of pages of discovery. See Caneva, 550 F.3d at 762 (quoting In re 

Scott, 172 F.3d 959, 969 (7th Cir. 1999)). Put differently, “if there is a needle in 

this haystack [of discovery], it is [not] up to the court to find it.” Id.
5 

AFFIRMED.