In re Langholf, Bankruptcy No. 82-B-00466
| Decision Date | 10 February 1984 |
| Docket Number | Adv. No. 83-A-0238.,Bankruptcy No. 82-B-00466 |
| Citation | 37 BR 414 |
| Parties | In re Bruce F. LANGHOLF and Julie Ann Langholf, Debtors. ROCK RIVER PRODUCTION CREDIT ASSOCIATION, Griffith Lumber and Grain Company, International Multifoods and Heckert Farm Supply, Plaintiffs, v. Bruce F. LANGHOLF and Julie Ann Langholf, Defendants. |
| Court | U.S. Bankruptcy Court — Northern District of Illinois |
Charles Beckman, Leslie Lamping, Dixon, Ill., Mary Gorman, Bradley T. Koch, Rockford, Ill., for plaintiffs.
Mark V. Anderson, Rockford, Ill., for defendants.
This adversary proceeding comes before the Court on the Complaint of four creditors —Rock River Production Credit Association, represented by Attorney Charles Beckman, Griffith Lumber and Grain Company, represented by Attorney Bradley Koch, International Multifoods, represented by Attorney Mary P. Gorman, and Heckert Farm Supply, represented by Attorney Leslie Lamping—objecting to the discharge of the Chapter 7 Debtors, Bruce F. and Julie Ann Langholf, represented by Attorney Mark Anderson.
A series of admissions by the Debtors leaves us with the following fact pattern:
1. On May 21, 1982, the Debtors filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code.
2. On February 28, 1983, the Debtors converted their Chapter 11 bankruptcy to a Chapter 7 liquidation.
3. From May 21, 1982, to February 28, 1983, the Debtors were Debtors-in-Possession and remained in possession of their property and conducted their farming business.
4. From May 21, 1982, to February 28, 1983, the Debtors rented certain farmland from Stan Griffith pursuant to a written lease agreement which required the Debtors to remit fifty percent of all proceeds derived from their farming operations to Griffith as rental.
5. On or about May 25, 1982, the Debtors established a Debtor-in-Possession bank account with the United Bank of Rochelle and deposited slightly over $19,000 in order to open this account.
6. On or about June 25, 1982, the Debtors received a check from Central Life Assurance Company for nearly $3,000, payable to the order of the husband/Debtor, "Bruce F. Langholf". This check was cashed by the Debtors but the Debtors did not deposit the check in their Debtor-in-Possession Account. Nor did they report its receipt in any monthly or semi-monthly report filed with the Court in their Chapter 11 case.
7. On or about November 6, 1982, the Debtors received a check for nearly $8,700 from Jack Peters as payment for the sale of 164 pigs. Remittance of fifty percent of the proceeds of this sale to their landlord, Stan Griffith, was not made by the Debtors until late April, 1983. (In addition, the testimony at trial of Stan Griffith revealed that he had no notice of this sale by the Debtors until the first meeting of creditors after the Debtors converted their case to Chapter 7 in April of 1983.) No mention of receipt of these proceeds was made by the Debtors in any monthly or semi-monthly report filed with the Court in their Chapter 11 case.
8. On or about June 7, 1982, the Debtors were issued a check for $2,000 by the United Bank of Rochelle. The Debtors cashed this check, but no related record of receipt or disbursement of the proceeds was made in any monthly or semi-monthly report filed with the court by the Debtors in their Chapter 11 case.
9. On the date on which the Debtors filed their Chapter 11 petition, they owed over $6,000 to the Kelley-Williamson Company, much of this amount being past due. Nonetheless, Kelley-Williamson Company was not listed as a creditor in the schedules filed by the Debtors in their Chapter 11 case.
10. On or about June 30, 1982, the Debtors tendered a check for nearly $2,000 to First Federal Savings & Loan Association of Dixon (First Federal). The Debtors received back almost $600 in cash from First Federal. This receipt of cash does not appear in any monthly or semi-monthly report filed by the Debtors in their Chapter 11 case.
11. On or about July 31, 1982, the Debtors tendered the sum of $960.56 to First Federal. Of this money, $622 was in the nature of a loan payment to First Federal, and $338.56 was converted to a money order payable to "Goodyear Service". Neither of these disbursements is reported in any monthly or semi-monthly report filed by the Debtors in their Chapter 11 case.
12. On or about August 19, 1982, the Debtors tendered a check for over $2500 to First Federal. From the proceeds of this check, money orders were issued payable to "Pineway Super Mart" ($81), "Country Mutual Insurance" ($828.49), and "Commonwealth Edison" ($784.62). These disbursements were not reported in any monthly or semi-monthly report filed by the Debtors in their Chapter 11 case.
13. On or about September 7, 1982, the Debtors received a $1900 check from the Griffith Family, endorsed it over to First Federal, and from the proceeds had money orders issued payable to "Franklin Mint" ($85) and "Sauk Valley College" ($250), neither of which was reported in any monthly or semi-monthly report filed by the Debtors in their Chapter 11 case. In addition, the Debtors received from these proceeds $834.20 in cash. No mention is made as to the receipt or disposition of this cash in any monthly or semi-monthly report filed by the Debtors in their Chapter 11 case.
14. On or about September 15, 1982, the Debtors received a $12,180 check from Jack Peters and endorsed it over to First Federal. From the proceeds of this check, the Debtors had money orders issued payable to the order of "Stan Griffith" ($6090), "First National Bank" ($1958.20), "Kelley-Williamson" ($2000), "Visa" ($150), "Montgomery Wards" ($208.61), "J.C. Penney" ($88.28), and "Commonwealth Edison" ($552.06). Further, the Debtors received back from First Federal $1132.85 in cash. None of these receipts or disbursements were reported in any monthly or semi-monthly report filed by the Debtors in their Chapter 11 case.
15. On or about September 26, 1982, the Debtors received a $12,600 check from Jack Peters. The Debtors endorsed the check over to First Federal and from the proceeds had money orders issued to, inter alia, "Stan Griffith" ($6300), "Stuart Tank Service" ($1900), and "James Miller", ($486). Also, the Debtors received back $2251.80 in cash from First Federal. These receipts and disbursements were not reported in any monthly or semi-monthly report filed by the Debtors in their Chapter 11 case.
16. On or about October 19, 1982, the Debtors received an $8,760 check from Jack Peters. The Debtors endorsed the check over to First Federal, and from the proceeds had money orders issued payable to, inter alia, "Stan Griffith" ($4,380). This disbursement is not reported in any monthly or semi-monthly report filed by the Debtors in their Chapter 11 case. From these proceeds, the Debtors received $2229.02 in cash, the receipt of which also went unreported.
17. On or about November 1, 1982, the Debtors received a $2966.83 check from Heinold Hog Market, Inc. The Debtors endorsed the check over to First Federal and from the proceeds had money orders issued payable to "Time/Life", ($28.42), and "Visa" ($100). These disbursements were not reported in any monthly or semi-monthly report filed by the Debtors in their Chapter 11 case.
18. On or about November 6, 1982, the Debtors received an $8692 check from Jack Peters and endorsed the check over to First Federal. From the proceeds the Debtors had money orders issued payable to, inter alia, "Franklin Mint" ($57.20), "Newsweek" ($19.50), "Zoobooks" ($9.95), and "Federal Life Insurance", ($243). The Debtors also received back $1489.52 in cash. These disbursements and the receipt and utilization of cash are not reported in any monthly or semi-monthly report filed by the Debtors in their Chapter 11 case.
19. On or about November 10, 1982, the Debtors received a $2179.80 check from Heinold Hog Market and endorsed the check over to First Federal. From the proceeds the Debtors disbursed a $653.10 loan payment to First Federal, which disbursement was not reported in any monthly or semi-monthly report filed by the Debtors in their Chapter 11 case. The Debtors also received from these proceeds $2179.80 in cash, the receipt and utilization of which was also not reported.
20. On or about November 26, 1982, the Debtors tendered a $7565.79 check to First Federal. From the proceeds, the Debtors had money orders issued payable to, inter alia, "Grolier Telemkgt" ($100), "Kelley-Williamson" ($1012.47), "Fleetwood" ($39), "Jesse Griffith" ($2800), and "Polo Motors" ($250.08). These disbursements were not reported in any monthly or semi-monthly report filed by the Debtors in their Chapter 11 case.
21. The Debtors did not utilize their Debtor-in-Possession Account during the months of August, September, October, and November 1982.
22. Also, during the pendency of their Chapter 11 case, the Debtors deposited various checks in their Debtor-in-Possession Account from which they received cash back as detailed below:
Date Source Amount Deposited Cash
5/25/82 To Open Account $19,727.21 $19,727.21 .00
6/06/82 Jack Peters $ 6,850.00 $ 4,000.00 $2,850.00
6/16/82 Heinhold Hog Market $ 2,971.77 $ 1,821.77 $1,150.00
7/20/83 Heinhold Hog Market $ 2,881.40 $ 1,678.23 $1,203.17
12/8/82 Heinhold Hog Market $ 3,110.20 $ 3,010.20 $ 100.00
1/04/83 Heinhold Hog Market $ 330.00 $ 330.00 $ .00
1/07/83 Heinhold Hog Market $ 400.00 $ 400.00 $ .00
1/10/83 Heinhold Hog Market $ 2,091.01 $ 1,174.34 $ 916.67
1/13/83 Stan Griffith $ 554.31 $ 554.31 $ .00
1/19/83 # 2088...To continue reading
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