In re Tinkler
Decision Date | 02 June 2004 |
Docket Number | Bankruptcy No. 03-10189 DEC.,Adversary No. 3-1304 HRT. |
Parties | In re Charles F. TINKLER, Jr., Debtor. Bombardier Capital, Inc., Plaintiff, v. Charles F. Tinkler, Jr., Defendant. |
Court | United States Bankruptcy Courts. Tenth Circuit. U.S. Bankruptcy Court — District of Colorado |
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Nancy D. Miller, Denver, CO, for Debtor.
Maria J. Flora, Denver, CO, for Trustee.
This case comes before the Court on Plaintiffs Amended Complaint for Determination that Debt is not Dischargeable the "Amended Complaint". The matter was tried to the Court on March 29, 2004 and March 30, 2004. The Court has reviewed the evidence adduced at trial and has considered the arguments of the parties. It is now ready to rule.
Plaintiffs Amended Complaint states causes of action under 11 U.S.C. § 523 for nondischargeability of Defendant's debt to Plaintiff due to: embezzlement or larceny, § 523(a)(4); and willful and malicious injury, § 523(a)(6). The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334(b) and 28 U.S.C. § 157(b).
The following facts are relevant to the Court's determination of this matter:
Discussion
This action is brought to except Mr. Tinkler's debt to BCI from his bankruptcy discharge. BCI proceeds under two theories: 1) that the debt is nondischargeable pursuant to 11 U.S.C. § 523(a)(4) as a debt for embezzlement or larceny; or 2) that the debt is nondischargeable pursuant to 11 U.S.C. § 523(a)(6) as a debt for willful and malicious injury.
The threshold issue in this case is whether Mr. Tinkler, the individual, may be held to account for the debts of Grand Lake Motor Sports, Inc. As a general rule, a corporate officer or shareholder, by virtue of that status alone is not liable for the acts or debts of the corporation. Newport Steel Corp. v. Thompson, 757 F.Supp. 1152, 1156 (D.Colo.1990) () (citing United States v. Van Diviner, 822 F.2d 960, 963 (10th Cir.1987)). That is true even when the officer controls the operations of the corporation or is the sole shareholder of the corporation. The fact that Mr. Tinkler signed a personal guarantee of the corporate debt is of no relevance in this context. Non-dischargeability under § 523 is based upon the actions of the Debtor and not upon the mere fact of a personal guarantee.
If Mr. Tinkler is guilty of a wrongful act, the Court would be justified in disregarding the corporate entity to hold him accountable for his tort. But, even though there was argument to the effect that Mr. Tinkler had diverted funds from BCI's collateral to his personal use, the Court has seen no documentary evidence nor has it heard any testimony that substantiates that claim.
Conversely, if the corporation has committed a tort and Mr. Tinkler's individual actions, as opposed to his general corporate control, caused the corporation's tortious act, then he may be held to account. Hoang v. Arbess, 80 P.3d 863, 867 (Colo.Ct.App.2003) () (citing Snowden v. Taggart, 91 Colo. 525, 17 P.2d 305, 307 (1932)). The Court must, therefore, determine if Grand Lake has committed a state law tort. Wachovia Bank and Trust Co. v. Banister (In re Banister), 737 F.2d 225 (2nd Cir.1984) ( ).
BCI claims that its collateral has been converted. ...
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