181 F.3d 104 (6th Cir. 1999), 98-5526, Matter of Tincher

Docket Nº:98-5526.
Citation:181 F.3d 104
Party Name:In re: Edward TINCHER, Debtor. CATERPILLAR FINANCIAL SERVICES CORPORATION, Appellee, v. Edward TINCHER, Appellant, David SCHOTT, Third Party Appellee.
Case Date:April 21, 1999
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
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Page 104

181 F.3d 104 (6th Cir. 1999)

In re: Edward TINCHER, Debtor.

CATERPILLAR FINANCIAL SERVICES CORPORATION, Appellee,

v.

Edward TINCHER, Appellant,

David SCHOTT, Third Party Appellee.

No. 98-5526.

United States Court of Appeals, Sixth Circuit

April 21, 1999

         Editorial Note:

         This opinion appears in the Federal reporter in a table titled "Table of Decisions Without Reported Opinions". (See FI CTA6 Rule 28 and FI CTA6 IOP 206 regarding use of unpublished opinions)

        On Appeal from the United States District Court for the Eastern District of Kentucky.

        Before KRUPANSKY, SILER, and BATCHELDER, Circuit Judges.

        SILER, Circuit Judge.

        Debtor Edward Tincher appeals the district court's judgment affirming a bankruptcy court's determination that a loan from creditor Caterpillar Financial Services Corporation was excepted from discharge because of the debtor's material misrepresentations in securing the loan. Because the bankruptcy court's findings of facts are not clearly erroneous, we AFFIRM.

        Factual Background and Procedural History

        Tincher has been a self-employed coal miner since 1984. In 1988, he created Whymore Coal Company, Inc., of which he is president and sole owner. Whymore performs coal extraction and earth-moving services. To perform its business, it leased or purchased certain equipment from Whayne Supply Company, an intermediary of Caterpillar.

        In 1994, Tincher, on behalf of Whymore, began discussions with John Culver, a salesman for Whayne, about purchasing new equipment and consolidating his outstanding indebtedness. 1 Whayne's credit manager, David Goins, devised a formal proposal for the deal with Whymore and requested certain financial information from Tincher including a personal financial statement. Culver delivered the requested information from Tincher to Goins, who received Tincher's financial statement in a sealed envelope. Goins then forwarded the information to Mike Thompson, an employee of Caterpillar, who sent the information to Hubert Freund, Caterpillar's credit manager, for his approval.

        As part of this process, Thompson advised Freund of Whymore's equipment financing history, net worth, and income. He also indicated that Tincher's net worth was approximately $950,000, an amount which primarily represented Tincher's interests in real estate. This figure was taken from Tincher's personal financial statement. 2

        Freund directed Thompson to obtain operations information on Whymore and a credit report on Tincher. Although most of Tincher's net worth was based on real estate holdings, the credit report Freund received did not list any real estate liens.

        Freund approved a $1,233,000 transaction between Caterpillar and Whymore, with Tincher personally guaranteeing the loan. Freund approved the loan based on Whymore's past payment and operations history and on Tincher's credit rating and net worth of $600,000. 3

        In 1995, Whymore defaulted on the loan. Caterpillar exercised the right of self-help and sold...

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