Expert: Terry Leeders - 6/20/2007

Question
WE are currently faced with a notice of adversary proceeding(the debtor,brother,Trustor,defendant)was scheduled to trial on August7,in Texas for breach of fiduciary duty,this staying by virtue of his Chapter 7 filing.A Notice of Hearing to consider "Notice of Removal"is set for July 18.The Case# is 07-42522-rfn7 Adversary#07-04073-rfn,(search last name pansky) in the northern district Texas.The civil litigator's hands are tied,and not a bk attorney,she is currently seeking counsel/advice.What should we do? What is the next step,what things will a good attorney do in the plaintiffs behalf?
How does one contest a property value,if it is believed that the debtor lists an amount on Schedule A that is untrue.Must there be an appraisal or does one use tax assessed value?
On the Disclosure of compenstion to Attorney,can the debtor/payee other than debtor be held to accountability/audit to prove the source of those funds?
In chapter 7 can a commission sales realtors income formula/means test be reassessed if his income post discharge of bankruptcy increases dramatically ?
I guess my main question is can he use the Bankruptcy laws to avoid standing trial or will the judge see this for what it is.
Or do the Bankruptcy laws enable a trustee to breach a few hundred thousand $$'s and get away with it?  

Answer
The person filing the adversary has the burden to prove that the schedules are incorrect.  Then the debtor would have the chance to rebut that evidence.  Then the judge would make an evidentiary decision on the facts and law.  

Therefore, if you feel the value is miss-stated, then an appraisal or multiple appraisals would be the strong evidence.

The income and expenses that are disclosed on schedule I & J are at the time of the case filing.  If the debtor had information of a known change expected, then there is a section to disclose that.

These issues are very complex, so you should speak to an experienced bankruptcy attorney in Texas to help protect your interests.  (I am in IL and some local laws and caselaw may vary).  It sounds like there is a business interest involved, so you would definately want to get professional advice.  best of luck to you.