This adversary proceeding was brought under § 523(a)(2)(A) by an Ohio receiver against certain alleged “net winners” in a Ponzi scheme. The defendants moved to dismiss the complaint under Rule 12(b)(6) for failure to allege they personally committed fraud.

The bankruptcy court denied the plaintiff’s Rule 52(b) motion to amend its findings of fact and conclusions of law holding that most of the debt owed to her by the defendant is dischargeable under § 523(a)(2)(A). The motion to amend did not identify any manifest errors of law or fact; it simply reargued positions the court had already considered and rejected.

The court excepted a portion of the debt owed to a lender under § 523(a)(2)(B) because the bank reasonably relied on the debtor’s written financial statements, one of which the debtor signed with reckless indifference to or in reckless disregard of its accuracy.

The bankruptcy court excepted part of a judgment debt from discharge under § 523(a)(2)(A).

The bankruptcy court reiterated that a judgment lien on the debtor’s 50% interest in his house is fully avoided, but the judgment creditor may go to state court for a determination of the extent of the debtor’s interest vis-à-vis his former wife’s interest in the property, which was their marital home.

The court, after a trial, sanctioned the debtor for violating the automatic stay and the court’s turnover orders. The court found the debtor and his son repeatedly interfered with the trustee’s possession of certain real property, the debtor caused post-petition liens to be filed against the real estate, and the debtor withdrew IRA funds outside the scope of a court order authorizing certain withdrawals.

The court denied the debtor-defendants’ motion for summary judgment, finding that factual issues as to intent require a trial.

The bankruptcy court granted the Chapter 7 trustee’s motion to sell residential real estate over the objection of the debtor (who lacked standing) and several holders of construction liens on the property.

The bankruptcy court denied the debtors’ motion for turnover of funds from a pre-petition garnishment because the garnishment must first be avoided through an adversary proceeding. The court also denied the debtors’ request for sanctions under §362(k) for willful violation of the automatic stay for not releasing the garnishment upon learning of the bankruptcy case. The court noted that debtors and creditors share responsibility for getting garnishments released.

The bankruptcy court granted relief from the automatic stay to permit arbitration to continue.