From a court ruling involving Sandoval and Keng:
OPINION
PER CURIAM:
On April 5, 1995, Carlos Sandoval filed a bankruptcy petition
under Chapter 11 of the Bankruptcy Code. First Union Bank of Virginia*
claimed that Sandoval fraudulently transferred property in violation
of 11 U.S.C. § 727, and therefore should not be entitled to a
discharge. The bankruptcy court found, based on the facts before it,
that Sandoval had engaged in a fraudulent transfer, and therefore,
denied Sandoval's discharge. The district court affirmed the bankruptcy
court. Likewise finding no error in the court's ruling, we
affirm.
I.
Sandoval is a lawyer licensed to practice law in Virginia who was
previously one of two shareholders in the Martinez and Sandoval law
firm. The firm had a line of credit with First Union, which was guaranteed
by Sandoval, and borrowed money. The firm defaulted on the
loan around July or August 1994, and on September 22, 1994, its
unsecured creditors filed an involuntary Chapter 7 petition in Bankruptcy
Court. On October 7, 1994, First Union obtained a confessed
judgment against Sandoval in Fairfax Circuit Court for $47,649.39.
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On October 27, 1994, the debtor filed a motion to set aside the judgment,
and on October 28, 1994, First Union docketed the judgment
in the Circuit Court for Prince George's County, Maryland.
In early November 1994, Sandoval transferred his individually held
interests in his residence (located in Charles County, Md) and his
automobile to himself and his wife as tenants by the entirety. The
deed was recorded in Charles County, Maryland on December 6,
1994. Sandoval alleges that the transfer took place pursuant to an oral
pre-nuptial agreement between himself and his wife whereby they
agreed that all property would be transferred to joint ownership no
later than their first wedding anniversary, November 4, 1994. After
the transfer of the property, Sandoval filed a Motion to Set Aside the
Judgment of the Circuit Court, which was denied on December 16,
1994.
First Union docketed its judgment in Charles County, Maryland in
January 1995. On April 5, 1995, Sandoval filed a bankruptcy petition
under Chapter 11 of the Bankruptcy Code. On June 23, 1995, First
Union filed a complaint in bankruptcy court objecting to Sandoval's
dischargeability of debt. Sandoval filed an answer, and a motion to
dismiss, or, in the alternative, for summary judgment.
On February 27, 1996, the bankruptcy court heard oral argument
on the complaint and pending motions and denied Sandoval's motion.
On March 4, 1996, the bankruptcy court conducted a hearing and
ruled from the bench finding, inter alia, that Sandoval had engaged
in conduct that constituted a fraudulent transfer under the Bankruptcy
Code (Code), 11 U.S.C. § 727(a)(2)(A), and therefore, Sandoval's
discharge was denied.
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Third, Sandoval contends that the purpose of the Bankruptcy Code,
i.e., to give an honest debtor a fresh start, supports a ruling in his
favor. Simply put, since we have determined based on the stipulated
facts and relevant law that Sandoval was correctly judged to have
fraudulently transferred property to avoid discharge, Sandoval's suggestion
that the "honest debtor" protection of Code should apply to
him begs the question. Considering the facts in this case, Sandoval
cannot now defend his fraudulent actions under the auspices
Read the full ruling here:
http://pacer.ca4.uscourts.gov/opinion.pdf/962391.U.pdf