07/02/2012 02:27:00 PM EST
In re Mitchell, 2012 Bankr. LEXIS 2699 (Bankr. E.D.N.C. June 14, 2012)
Collier on Bankruptcy was cited in this recent decision:
Collier on Bankruptcy section cited: 7 Collier on Bankruptcy ¶ 1104.02[b] (accessible by lexis.com subscribers).
Lexis.com subscribers can view the enhanced version of In re Mitchell.
LexisNexis Overview: The administrator contended that the debtor failed to disclose the property transfers and made preferential payments to creditors, including family members. The administrator further argued that counsel for the debtor also represented the principal which created a potential conflict of interest with regard to the property transfers. The bankruptcy court first held that the debtor's conduct lacked insufficient indicia of fraud to warrant appointment of a trustee. Although not initially disclosed, the property transfers were disclosed in sufficient time to allow investigation of the transaction and the debtor's schedules were promptly amended, and the debtor took steps to recover the pre-petition payments to legitimate creditors upon learning that the payments were prohibited. However, there were questions concerning possible legal defects and insufficiency of the purchase price in the property transfers which raised a colorable claim of fraudulent transfer, and disqualification of the debtor's counsel's was thus warranted based on counsel's potential conflict of interest.
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