NORWEST BANK NEBRASKA V. TVETEN
848 F.2d 871 (1988)
NATURE OF THE CASE: Tveten (P) appealed an affirmation of an order of the bankruptcy court that denied P a discharge in his Chapter 11 bankruptcy on the finding that P intended to defraud, delay, and hinder his creditors.
FACTS: P had invested in various real estate developments. Initially, these investments were quite successful. The investments were highly leveraged. P, personally had guaranteed the debt arising out of these investments. In mid-1985, things went south. P, a physician, owed $18,920,000 on the personal guaranties. Prior to his petition, on advice of counsel, P liquidated almost all of his non-exempt property, converting it into exempt property worth approximately $700,000. It took 17 transactions to do this. All of the liquidated property was converted into life insurance or annuity contracts with the Lutheran Brotherhood, a fraternal benefit association, which, under Minnesota law, cannot be attached by creditors. P concedes that the purpose of these transfers was to shield his assets from creditors. Minnesota law provides that creditors cannot attach any money or other benefits payable by a fraternal benefit association. The Minnesota exemption has no monetary limit. The creditors objected. The bankruptcy court held that P had abused the protections permitted a debtor under the Bankruptcy Code. The court concluded that P intended to hinder and delay his creditors. Accordingly, the bankruptcy court denied a discharge. P appealed.
ISSUE:
RULE OF LAW:
HOLDING AND
DECISION:
LEGAL ANALYSIS:
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