60.1K

Verified Solution

Link Copied!

Assuming you are the debtors lawyer in the bankruptcy of Jerry Mayers

who teaches antitrust law and copyright at the University of the Southern States

Law School in Biloxi, Mississippi.

Six months before filing his bankruptcy case, Mayers incurred several

debts which led to the following claims in his bankruptcy case.

First, Local Bank filed an unsecured claim for $950. Six months before his

bankruptcy filing, Mayers had applied for a loan for $1,000 to pay for his various

bad habits. Local Bank had him fill out a financial statement in connection with

the loan. He had nine debts totaling $12,000. He asked the loan officer what to

do, and the bank official told him to just do your best. Mayers listed the four

highest debts totaling $8,000, but omitted the other eight. Mayers signed the

financial statement and gave it to the bank official, who promptly put it in the filing

cabinet. The bank officer then immediately gave Mayers the $1,000 in $50 dollar

bills.

Second, a claim for $7,555 by American Express for charges on Mayerss

American Express Charge Card. Mayers tells you that for the two years before

bankruptcy, he let his sister use the card because she was starting a business

and needed the credit. Further discussions reveal that Mayerss sister has been

receiving government assistance for five years, and that her business is already

in financial difficulty because she cannot pay its bills. Mayers says he shouldnt

be responsible for this bill, but you determine that his sister is not an authorized

card holder under Mayerss account agreement with AMEX.

Finally, Mayerss brother loaned him $2,000 a month before his bankruptcy

filing with no questions asked. Apparently Mayers had done the same for his

brother awhile back, and his brother wished to reciprocate. Mayers promptly

went to a local casino and blew all of the money. While losing at blackjack (he

plays based upon his gut, not his brain), Mayers told the dealer that his brother

and his whole family could go to Hades for all I care theyve taken from me all

my life, now Im going to get them.

Required:

Anticipate any arguments that the foregoing creditors might make in

seeking to maximize their recovery in Mayerss bankruptcy case, and evaluate

what the result will be. Please state any additional facts that might be relevant to

a final determination in each case.

Answer & Explanation Solved by verified expert

See Answer