66 East Main Street, 3rd Floor Little Falls, NJ 07424

Watches Worth over $400K Cannot be Found – Lost in the Shuffle?

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Background

  • Debtors (both surgeons) filed for Chapter 7
  • $5.6 million in Debt
  • $400K in assets which included jewelry they valued at less than $15K
  • Chapter 7 Trustee noted a potential fraudulent transfer wherein the Debtor returned about 20-30 valuable watches.
  • The Debtors could not and did not keep accurate records of these watches.
  • Debtors would get watches from a jeweler and keep the ones they wanted and return the rest.  However, the receipts and returns did not match at all.
  • The jeweler filed a Proof of Claim for approximately $414K for watches that the Jeweler delivered to the Debtors but were not returned.
  • The surgeon Debtors claimed that just did not keep good records. 

Court Ruling

  • Trustee filed an adversary proceeding and the matter progressed to the appellant court.
  • The lack of receipts and returns were questionable at best.   The missing watches were neither found nor could be located in any paperwork indicating these watches were returned.
  • The U.S. Court of Appeals agreed with both lower courts and the Chapter 7 Discharge for the surgeons were denied.

I hope these surgeons do a better job documenting their surgeries.

Watches are still missing but the Debtors also have all their debts. Honesty is the best policy when you file a Bankruptcy.