## Facts

- Don Davis and Roe Davis (unrelated) co-owned a pharmacy opened in 1983; Roe held 51% and Don 49%.
- To finance the business, each individually signed promissory notes for borrowed funds.
- The pharmacy closed in October 1985; a final bank loan became due in October 1986.
- Two days after the note’s due date, Don discussed with counsel his inability to pay and concern about losing his home; he then deeded his one-half interest in the home to his wife.
- In November 1986, Roe paid the bank note balance ($118,395.24), sued Don for contribution, and obtained a default judgment for $58,694.24.
- Two days after obtaining judgment, Roe filed a fraudulent conveyance action to set aside Don’s transfer to his wife.
- After being served, Don consulted bankruptcy counsel and reversed the transfer; the corrective deed was executed and recorded.
- The day after recordation, Don filed a Chapter 7 petition and disclosed both transfers in his schedules as occurring within one year of filing.
- Roe filed an adversary proceeding seeking denial of discharge under 11 U.S.C. § 727(a)(2)(A).

## Issues

1. Whether a debtor’s discharge must be denied under 11 U.S.C. § 727(a)(2)(A) when, within one year before filing, the debtor transferred property with intent to hinder, delay, or defraud a creditor.
2. Whether reconveying the property back to the debtor before the bankruptcy filing and making the property available to creditors negates the statutory bar to discharge.

## Decision

- The Eleventh Circuit affirmed the district court, which had affirmed the bankruptcy court’s denial of discharge.
- The court held that § 727(a)(2)(A) focuses on the debtor’s intent at the time of the transfer within the one-year period.
- The later reversal of the transfer and restoration of the property to the estate did not cure the prior transfer made with prohibited intent.
- The court deferred to the bankruptcy court’s factual finding of intent to hinder, delay, or defraud, supported by timing and circumstances surrounding the deed to the wife.

## Legal Principles

- A discharge must be denied under 11 U.S.C. § 727(a)(2)(A) if the debtor, within one year before filing, transferred property with intent to hinder, delay, or defraud a creditor.
- The statutory violation is triggered by the transfer and intent within the one-year period; it does not depend on whether the property remains outside creditors’ reach at filing.
- Undoing or reversing the transfer before filing does not eliminate the original fraudulent intent or restore eligibility for discharge.
- Appellate review gives substantial weight to the bankruptcy court’s intent findings when supported by record evidence, including timing and debtor conduct.

## Conclusion

The court affirmed denial of the debtor’s Chapter 7 discharge because he transferred his interest in his home to his wife within one year of filing with intent to hinder, delay, or defraud a creditor, and reconveyance before filing did not negate the statutory bar under § 727(a)(2)(A).


Davis v. Davis (In re Davis), 911 F.2d 560 (11th Cir. 1990)