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In re Iredia

United States District Court, E.D. Pennsylvania

March 27, 2017

IN THE MATTER OF OCHOLI OCHALA IREDIA, also known as “OCHOLI OCHALA, ” “OCHOLI IREDIA, ” and “MINUTEMAN PRESS” Bankruptcy No. 15-18450

          MEMORANDUM

          DuBois, J.

         I. INTRODUCTION

         This is a bankruptcy appeal. Debtor Ocholi Ochala Iredia (“Debtor”) appeals from a decision of the United States Bankruptcy Court for the Eastern District of Pennsylvania granting the United States Trustee's (“Trustee”) Motion to Dismiss Debtor's bankruptcy case for cause, with a two-year bar on refiling. Debtor also appeals certain evidentiary decisions made during the bankruptcy proceedings. For the following reasons, the Court affirms the rulings of the Bankruptcy Court.

         II. BACKGROUND

         The facts of this case have been previously set forth in the opinion of the Bankruptcy Court. In re Iredia, 556 B.R. 691 (Bankr. E.D. Pa. 2016). In this Memorandum, the Court repeats only those facts necessary to resolve the issues presently before the Court.

         a. Baystone's 2012 Bankruptcy

         On October 19, 2012, Baystone Group, LLC (“Baystone”) filed a Chapter 7 bankruptcy petition (“Baystone Bankruptcy”), which Debtor signed and filed as president and 100% owner of Baystone. In re Iredia, 556 B.R. at 692. During the proceedings, Debtor testified that he personally owned a Minuteman Press franchise (“MP franchise”). Id.

         b. Debtor's 2014 Bankruptcy

         On October 14, 2014, Debtor filed a pro se Chapter 7 personal bankruptcy petition (“2014 Bankruptcy”). In re Iredia, 556 B.R. at 692. Debtor attended the first meeting of creditors. Id. at 693. However, Debtor failed to attend the next two meetings of creditors, so the Bankruptcy Court dismissed the petition on May 19, 2015. Id. Debtor moved to reopen the petition on July 6, 2015, and the Bankruptcy Court granted that Motion on July 27, 2015. Id. Debtor attended a September 1, 2015 meeting of creditors, but failed to provide a number of requested documents. Id. The Bankruptcy Court therefore continued the meeting until September 30, 2015. Id. Debtor failed to attend that meeting, so the Bankruptcy Court continued it until October 14, 2015. Id.

         Meanwhile, Debtor asked for a conference to address “concerns with the documents requested by the Trustee.” In re Iredia, 556 B.R. at 693. On October 4, 2015, the Bankruptcy Court held a conference to address Debtor's concerns “by reviewing the role of the Trustee in the Debtor's case and confirming that the Trustee was entitled to request the documents that she sought from the Debtor.” Id.

         Even so, at the next meeting of creditors, on October 14, 2015, Debtor refused to answer the Trustee's questions regarding his ownership interest in the MP franchise. In re Iredia, 556 B.R. at 693. Rather, Debtor “directed the Trustee to contact his attorney, but refused to provide the name of his attorney.” Id. The Trustee adjourned the meeting until November 19, 2015, and requested that Debtor bring certain documents to that meeting. Id. at 694. On October 19, 2015, the Trustee filed a Motion to Dismiss based on Debtor's “evasive, obstructionist and unresponsive” testimony at the meetings of creditors. Id. The Trustee amended the Motion on November 9, 2015, to add Debtor's failure to obtain credit counseling within the 180 days prior to filing as required under Section 109(h)(1). Id. After a hearing, on November 18, 2015, the Bankruptcy Court dismissed the petition because of Debtor's failure to timely obtain credit counseling. Id.

         c. Debtor's 2015 Bankruptcy

         On November 24, 2015, Debtor filed a second pro se chapter 7 personal bankruptcy petition. In re Iredia, 556 B.R. at 694. Debtor's bankruptcy schedules did not disclose any ownership interest in Minuteman Press Conshohocken LLC (“MPC”) or the MP franchise. Id. at 695. However, Debtor filed a number of documents that indicated he had some interest in those entities. With respect to the MP franchise, Debtor attached to the bankruptcy petition two bills of sale. Id. at 694. The first, dated May of 2009, purported to convey ownership of “Minuteman Press Full Service Printing Center in Conshohocken” and the name “Minuteman Press of Conshohocken” from Charles and Loretta McNally to Debtor. Id. The second, dated December 29, 2009, purported to convey ownership of a “marketing services and printing business” in Conshohocken and “the name Minuteman Press of Conshohocken” from Baystone to MPC. Id. But Debtor “failed to produce any document that evidence a transfer of ownership of the MP Franchise from himself to Baystone, ” and Baystone itself, according to records filed with the Department of State, was not even formed until October 12, 2012. Id. at 698. In addition, Debtor testified during the Baystone Bankruptcy that, as of 2012, he was the owner of the MP franchise. Id. at 692. With respect to MPC, on December 2, 2015, Debtor filed an Operating Agreement which indicated that he was one of MPC's three members and listed Debtor as its resident agent and manager. Id. at 695. Debtor simultaneously filed a Statement of Membership Interest indicating that he had a 20% ownership interest in MPC. Id.

         Based on these inconsistencies, the Trustee requested from Debtor documents relating to MPC and the MP franchise. In re Iredia, 556 B.R. at 695. On December 8, 2015, having received no response, the Trustee filed a Motion to Compel Debtor to produce certain documents. Id. The Bankruptcy Court held a hearing on January 6, 2016, at which the Bankruptcy Court ordered Debtor to produce the documents by February 6, 2016. Id. At that hearing, the Bankruptcy Court and also advised Debtor to obtain counsel within one month, to which Debtor responded “I will do that, yes.” Id.; Br. of Appellee, App'x Vol. 1, Tr. of Jan. 6, 2016, Hr'g (“Jan. 6 Tr.”), at 26:1- 9. Based on the production deadline of February 6, 2016, the Trustee continued the initial meeting of the creditors from January 15, 2016, to February 10, 2016, so that the Trustee could review the produced documents before the meeting. Id. at 695-96. However, Debtor produced only ‚Äúsome ...


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