1. Explain what Gomery failed to disclose in his bankruptcy filings and why he filed for bankruptcy.

2. List and discuss the reasons the court finds a lack of good faith on Gomery’s part.

Topous obtained a judgment against Clarence Kenyon Gomery, a lawyer (Debtor), and his law firm, Gomery and Associates, PLLC. That case arose from Mr. Gomery’s representation of Topous in various business transactions, including the purchase of property referred to as the Old Mitchell Creek Golf Course. Topous alleged that Mr. Gomery drafted an Operating Agreement creating a limited liability company, T & G Real Estate Development, LLC, to purchase and hold the Mitchell Creek property. Although Topous paid the full purchase price to acquire the property, Mr. Gomery defrauded Topous in the transaction by surreptitiously giving himself a one-half ownership interest in T & G in the Operating Agreement he drafted. The jury awarded ownership of the Mitchell Creek property to Topous and ordered Mr. Gomery to pay Topous damages in the net amount of $11,622.22 and imposed sanctions for Frivolous Defense and for Spoliation of Evidence (see Chapter 2) against Mr. Gomery and his law firm, jointly and severally, for $314,629.27.

Unable to pay the judgment, Mr. Gomery filed a voluntary petition under Chapter 13 on April 2, 2014. In July 2014, Mr. Gomery was arrested and charged with solicitation of murder. Detective Gomez testified about a recorded conversation between Mr. Gomery and Dale Fisher. During the course of the recorded conversation, Mr. Gomery offered Mr. Fisher $20,000 to kill Christopher K. Cooke, the attorney who represented Topous. Detective Gomez also testified that Mr. Gomery paid Mr. Fisher $1,000 during the recorded conversation, purportedly to purchase the weapon that would be used in committing the crime. Mr. Gomery is currently incarcerated and awaiting trial on these criminal charges.

Mr. Gomery seeks confirmation of his Chapter 13 Plan. The Trustee and Topous have objected to the Plan on the grounds that the Plan is not feasible, and that neither the Plan nor the petition was filed in good faith. The Trustee has also requested that Mr. Gomery’s case be converted to Chapter 7 due to the Debtor’s lack of good faith.

JUDICIAL OPINION

BOYD, Bankruptcy Judge … In his testimony, the Debtor consistently claimed to have no knowledge about the details of his personal finances or the finances of his law firm, Gomery and Associates, PLLC. He repeatedly refused to answer questions about specific transactions, instead referring them to his wife or sometimes his accountant, bookkeeper, or attorney. The Court finds the Debtor’s professed lack of knowledge surprising and implausible, particularly in light of the fact that he has been an attorney for twenty-five years and his representations that he reviewed all of the relevant financial information before certifying its accuracy in filings with this Court.

The evidence presented at the hearings established that the Debtor’s schedules failed to disclose a significant and valuable asset, JACCK Enterprises, LLC in which the Debtor had an interest. The assets of JACCK consist of two commercial buildings located at 413 and 423 Eighth Street in Traverse City, Michigan. When questioned about tax returns that showed Debtor as having a fifty percent ownership interest in JACCK, the Debtor insisted the tax returns were filed in error.

The accountant who prepared the Debtor’s tax returns, Jerry Keelan, testified that he always reported income from JACCK as partnership income. He also testified that the Debtor and Aileen Gomery were aware that the returns were being prepared in this manner. He explained that neither the Debtor nor Aileen Gomery (his co-owner in JACCK and sister) objected to the returns listing them as equal owners of JACCK until early in 2014.

The Court also notes that these sizeable payments to the Debtor or for his benefit were not adequately disclosed in the Gomery and Associates chapter 7 case. The Debtor signed the Gomery and Associates petition, schedules, on behalf of the PLLC, and he testified that he certified that the information contained in the documents was true and correct under penalty of perjury. ………………..