WANN VAN ROBINSON; MARY D. ROBINSON; THE WANN VAN ROBINSON REVOCABLE TRUST, Plaintiffs-Appellees,
JASON CLINT WORLEY, Defendant-Appellant, and BRUCE MAGERS, Trustee.
Argued: January 26, 2017
from the United States District Court for the Middle District
of North Carolina, at Greensboro. Thomas D. Schroeder,
District Judge. (1:14-cv-01083-TDS; 13-50180; 13-06081)
Clinton Shepperd Morse, Jeffrey Edward Oleynik, BROOKS,
PIERCE, MCLENDON, HUMPHREY & LEONARD, L.L.P., Greensboro,
North Carolina, for Appellant.
Rayford Kennedy Adams, III, SPILMAN THOMAS & BATTLE,
PLLC, Winston-Salem, North Carolina, for Appellees.
Scott Adams, SPILMAN THOMAS & BATTLE, PLLC,
Winston-Salem, North Carolina, for Appellees.
WILKINSON, NIEMEYER, and KEENAN, Circuit Judges.
WILKINSON, Circuit Judge.
Clint Worley, a Chapter 7 bankruptcy debtor, estimated the
value of his interest in a real estate investment company at
just 4% of his initial capital contribution. The bankruptcy
court found after a bench trial that Worley intentionally
lowballed his valuation and accordingly denied his discharge
under the false oath provision of 11 U.S.C. § 727(a)(4).
The district court agreed. We review that finding for clear
error, and for the reasons that follow, we affirm.
has spent much of his adult life studying and working in the
financial industry. In addition to earning a bachelor's
degree in finance from the University of Florida and an MBA
from Emory University, he worked at Edward Jones as a
financial advisor for almost a decade.
his time at Edward Jones, Worley got caught up in the heady
investment environment of the early 2000s and began
personally investing in a series of real estate ventures. One
of those ventures was Gemini Land Trust, LLC, which Worley
formed in January 2006 with his childhood friend, Joshua
Crapps. Worley contributed $65, 000 for a 49% interest in the
company; Joshua Crapps served as managing member and had
complete discretion over whether to distribute any profits or
retain the proceeds for future transactions. Gemini's
sole investment was a 10% share in Pelham Land Group, LLC,
which was managed by Crapps's father, Daniel Crapps.
Pelham owned 587 acres of Georgia timberland that, in 2012,
was worth an estimated $2, 250 per acre, or $1.32 million
total. The property also generated a few thousand dollars
each year from farming, hunting, and timber leases.
Worley's other investments flopped, and he filed for
bankruptcy on February 14, 2013. He initially classified the
filing as a "no asset" case, signaling to the
bankruptcy trustee that he did not own any non-exempt assets
that were worth distributing. See 11 U.S.C. §
554 (2012) (authorizing the trustee to "abandon [to the
debtor] any property of the estate . . . that is of
inconsequential value"). On Schedule B to the petition,
Worley estimated that his interest in Gemini had a market
value of $2, 500. He explained that he was unsure how to
value the minority stake in Gemini, but sought the advice of
counsel and applied the capitalization rate method.
Consequently, he took the largest annual distribution he
received from Gemini ($483, rounded up to $500) and
multiplied by a capitalization rate of five. Worley never
consulted with Joshua or Daniel Crapps before estimating the
value of his interest, though ...