Court Opinion

ID: 3211769
Source: CourtListenerOpinion
Date Created: 2016-06-10 00:01:02.422393+00
Date Added: 2024-06-11T12:26:29.117797
License: Public Domain

Case: 15-10804          Document: 00513541230        Page: 1   Date Filed: 06/09/2016

            IN THE UNITED STATES COURT OF APPEALS
                     FOR THE FIFTH CIRCUIT
                                                                              United States Court of Appeals
                                                                                       Fifth Circuit
                                            No. 15-10804                             FILED
                                                                                  June 9, 2016
                                                                                Lyle W. Cayce
In the Matter of: CENGIZ J. COMU                                                     Clerk

                Debtor

-----------------------------------------

CENGIZ J. COMU, also known as CJ Comu,

                 Appellant

v.

KING LOUIE MINING, L.L.C.; KING LOUIE ENTERPRISES, L.L.C.;
RONALD KATZ; DIANE G. REED,

                 Appellees

                      Appeal from the United States District Court
                           for the Northern District of Texas
                                  USDC 3:14-CV-4163

Before HIGGINBOTHAM, DENNIS, and CLEMENT, Circuit Judges.
PER CURIAM:*

        *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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
    Case: 15-10804    Document: 00513541230     Page: 2   Date Filed: 06/09/2016

                                 No. 15-10804

      The bankruptcy court revoked Debtor-Appellant Cengiz Comu’s
discharge pursuant to 11 U.S.C. § 727(d), which the district court ultimately
affirmed on appeal.    Comu now likewise asks our court to set aside the
bankruptcy court’s order revoking his bankruptcy discharge. For the same
reasons assigned in the district court’s thorough opinion, we affirm the
bankruptcy court’s revocation order.
      Because the bankruptcy court’s 141-page opinion exhaustively details
the underlying facts, we offer merely a brief sketch of the background. In
December 2009, Comu filed a voluntary petition for Chapter 7 bankruptcy. As
the evidence at trial revealed, Comu’s bankruptcy filing was prompted by a
default judgment entered against him in a New York state court civil action.
That action had been initiated by the Appellees in the instant case, who alleged
in the state court suit that Comu had committed common law fraud and
securities fraud in their previous business dealings.         After filing his
bankruptcy petition, Comu attended a creditors meeting in February 2010, at
which he testified under oath regarding the veracity of his bankruptcy filings.
Thereafter, in April 2010, Comu’s claimed debts, including the debt owed to
Appellees from the New York default judgment, were discharged by the
bankruptcy court.
      In September 2010, Appellees timely filed the underlying adversary
proceeding seeking a revocation of Comu’s bankruptcy discharge pursuant to
11 U.S.C. § 727(d)(1) and (2). The bankruptcy trustee thereafter intervened in
the adversary proceeding charging Comu with intentionally failing to disclose
substantial assets belonging to the bankruptcy estate. Following a five-day
bench trial, the bankruptcy court issued a bench ruling finding in favor of
Appellees and the Trustee.     Thereafter, the bankruptcy court entered its
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    Case: 15-10804    Document: 00513541230     Page: 3      Date Filed: 06/09/2016

                                 No. 15-10804

findings of fact and conclusions of law concluding that revocation of the
discharge was warranted “due to a substantial number of false oaths made
with fraudulent intent (which continued through trial), and due to substantial
undisclosed assets and valuable interests.”     The bankruptcy court further
found that there was “ample evidence” that Appellees “did not know the true
facts pertaining to Comu’s false oaths and undisclosed assets until after the
Discharge Date” and that Appellees “did not know about Comu’s fraud prior to
the Discharge Objection Deadline.”      Comu then appealed the bankruptcy
court’s order to the district court, which affirmed. This appeal followed.
      “This Court reviews the district court’s decision by applying the same
standard of review to the bankruptcy court’s conclusions of law and findings of
fact that the district court applied.” In re Woerner, 783 F.3d 266, 270 (5th Cir.
2015) (en banc) (internal quotation marks omitted). “We thus review factual
findings for clear error and legal conclusions de novo.” In re Frazin, 732 F.3d
313, 317 (5th Cir. 2013). Importantly, we have also observed that “[t]he right
to a discharge in bankruptcy is addressed to the sound discretion of the
bankruptcy court, and appellate courts should interfere only for the most
cogent, compelling reasons in situations of gross abuse.” United States v.
Cluck, 87 F.3d 138, 140 (5th Cir. 1996) (per curiam) (citation omitted).
      In the instant case, the bankruptcy court granted revocation of the
discharge pursuant to subsections (1) and (2) of 11 U.S.C. § 727(d), which
respectively provide that a discharge shall be revoked if:
      (1) such discharge was obtained through the fraud of the debtor,
      and the requesting party did not know of such fraud until after the
      granting of such discharge; [or]
      (2) the debtor acquired property that is property of the estate, or
      became entitled to acquire property that would be property of the
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    Case: 15-10804     Document: 00513541230      Page: 4   Date Filed: 06/09/2016

                                  No. 15-10804

      estate, and knowingly and fraudulently failed to report the
      acquisition of or entitlement to such property, or to deliver or
      surrender such property to the trustee.
11 U.S.C. § 727(d)(1)-(2). In challenging the discharge revocation on appeal,
Comu does not contest the bankruptcy court’s underlying finding that he
committed fraud by, inter alia, concealing substantial assets from the
bankruptcy proceedings. Rather, he principally argues that the bankruptcy
court erred in concluding that the creditors “did not know” about the fraud
prior to discharge.
      As the district court accurately observed, there was sufficient evidence
to support the bankruptcy court’s finding that Appellees were not aware of
Comu’s fraud in the bankruptcy proceedings until after discharge.              For
example, both Appellees and the Trustee consistently testified at trial that
“they did not learn the truth of Comu’s financial situation . . . [or] the scope of
[Comu’s] fraud, [until] after reviewing documents produced” by Comu in 2013
during the course of discovery. Given the absence of any clearly contradictory
evidence, the bankruptcy court was free to credit this testimony in making its
findings. We therefore agree with the district court that the bankruptcy court
did not clearly err in finding that Appellees were unaware of Comu’s fraud
until after the discharge.
      Because Comu has presented no other persuasive argument for setting
aside the bankruptcy court’s order revoking discharge, we AFFIRM.

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