Facts

On January 9, 2021, Evander Frank Kane, a professional hockey player, filed for Chapter 7 bankruptcy with the US Bankruptcy Court Northern District. At the time he filed for bankruptcy, he was playing for the San Jose Sharks. In his bankruptcy petition, Kane checked two boxes, stating that his debts were not primarily consumer debts and instead were primarily business debts. He left blank Question 16c, which instructed him to state the type of debts he owed that were not consumer or business debts. On January 28, 2021, Kane filed amended Schedules D and E/F and listed his total obligations at $28,191,340. This total obligation was listed, as considered by the bankruptcy court as including: $4,230,000 to Scotia Bank across two mortgages on two properties Kane owned in Vancouver, British Columbia; $2,320,000 to Pacific Private Holdings, secured by Kane's home in San Jose, California; $486,000 to 1000568 B.C. Ltd., secured by a second mortgage on the Canadian properties; $8,340,000 to Centennial Bank; $3,740,305 to Zions Bankcorporation; $1,354,541.79 to Professional Bank; $1,101,429.87 to South River LLC (which the bankruptcy court referred to as the business loans); and $715,000 to Lone Shark Holdings LLC. On March 29, 2021, Centennial Bank moved to dismiss Kane's Chapter 7 case under Section 707(b). On May 28, 2021, the Bankruptcy Court denied the motion to dismiss and Centennial appealed.

PLAINTIFF'S CONENTIONS: Plaintiff's argued that because Kane's debts were primarily consumer debts, granting Kane relief would be an abuse. As evidence, Centennial submitted evidence in which Kane had testified that the purpose of the Centennial Bank, Professional Bank and Zions loans was to pay off preexisting loans and that he had not used them to buy real estate, or invest in or purchase a business. Centennial Bank further challenged Kane's statement on the Chapter 7 petition that his debts were "primarily business debts," noting that it was antithetical to Kane's testimony and Schedules.

DEFENDANT'S CONTENTIONS: Defendant contended that the court used the appropriate legal standard in evaluating whether plaintiff's debt was consumer debt, looking to plaintiff's purpose in incurring the debt at issue. Moreover, plaintiff, as the moving party, had the burden of proof to show that the debt was consumer debt, before any burden regarding non-consumer debt shifted to defendant debtor.

Result

The bankruptcy court's decision was affirmed.