11 U.S.C. §727(a)(2); Fraudulent Conveyance; Collateral Estoppel
Playnation Play Systems, Inc. v. Hammer, 277 Ga. App. 675 (February 20, 2006).
Prior to filing for bankruptcy, the debtor transferred property after a state court judgment was entered against him. Debtor then filed a Chapter 7 petition and the creditor challenged his discharge pursuant to §727(a)(2) (transfer of property within one year with the actual intent to hinder, delay or defraud creditors). After a trial, the Bankruptcy Court ruled in favor of the creditor and the debtor was denied a discharge.
The creditor subsequently filed a lawsuit in state court requesting that the court set aside the fraudulent conveyance and award damages and attorneys fees pursuant to O.C.G.A. §18-2-22 (applicable to causes of action that arose prior to the repeal of §18-2-22 and the enactment of the Uniform Fraudulent Conveyance act on July 1, 2002). The creditor filed a motion for summary judgment, arguing that the Bankruptcy Court judgment precluded re-litigation of the fraud claims. The trial court denied the motion and the creditor appealed. The Court of appeals reversed, finding an “identity of issues” between §727(a)(2) and former O.C.G.A. §18-2-22.