BAP Appeal No. 24-21 Docket No. 65 Filed: 09/03/2025 Page: 1 of 23 FILED U.S. Bankruptcy Appellate Panel of the Tenth Circuit NOT FOR PUBLICATION 1 September 3, 2025 UNITED STATES BANKRUPTCY APPELLATE PANEL Anne M. Zoltani OF THE TENTH CIRCUIT Clerk _________________________________
IN RE CURT MICHAEL RANTA, BAP No. CO-24-21
Debtor.
_________________________________ Bankr. No. 23-13269 CURT MICHAEL RANTA, Chapter 7
Appellant,
v.
MARK KRIGSMAN, LISA KRIGSMAN, OPINION ANNALIESE KAMBOUR, and LAWRENCE RUBIN,
Appellees. _________________________________
Appeal from the United States Bankruptcy Court for the District of Colorado _________________________________
Before SOMERS, JACOBVITZ, and PARKER, Bankruptcy Judges. _________________________________
SOMERS, Bankruptcy Judge.
The Bankruptcy Code permits debtors to protect certain property through
exemptions, but it does not allow them to shield assets from creditors by converting
This unpublished opinion may be cited for its persuasive value, but is not 1
precedential, except under the doctrines of law of the case, claim preclusion, and issue preclusion. 10th Cir. BAP L.R. 8026-6. 1 BAP Appeal No. 24-21 Docket No. 65 Filed: 09/03/2025 Page: 2 of 23
nonexempt funds into exempt homestead equity when done “with the intent to hinder,
delay, or defraud a creditor.” Congress enacted this restriction in 11 U.S.C. § 522(o) 2 to
prevent debtors from fraudulently sheltering substantial wealth in real estate before filing.
Here, a chapter 7 debtor claimed a homestead exemption in a Colorado residence
purchased with more than $300,000 of nonexempt funds within two years of his petition.
Following an objection from certain creditors, the Bankruptcy Court reduced the claimed
exemption to zero under § 522(o) finding that the debtor acted with the intent to hinder or
delay creditors. After review of the record and applicable law, we determine the
Bankruptcy Court applied the correct legal standard, made credibility findings supported
by the evidence, and reached a result consistent with the text and purpose of the statute,
and thus, affirm.
I. Background
Curt Michael Ranta (“Appellant”) is a former real estate developer who operated
through various entities including Rantaman Properties, Inc. (“Rantaman”). 3 By 2017,
Marc Krigsman, Lisa Krigsman, Lawrence Rubin, and Annaliese Kambour (collectively,
“Appellees”) invested over $3.7 million in Rantaman’s Beverly Hills development
project. 4 The project ultimately failed, and the senior lender foreclosed, leaving
Appellees unpaid. 5
2 Unless otherwise noted, all statutory references are to sections of the United States Bankruptcy Code (the “Code”), 11 U.S.C. § 101 et seq. 3 Opinion and Order at 2, in Appellant’s Am. App. at 716. 4 Id. 5 Id. 2 BAP Appeal No. 24-21 Docket No. 65 Filed: 09/03/2025 Page: 3 of 23
In February 2022, Appellant purchased and moved into a home located at 16966
Rose Mallow Way in Parker, Colorado (“Rose Mallow Property”). 6 The purchase was
made with a $309,095.34 cash down payment and a $1,183,955 mortgage, with 99% of
the title vested in Appellant’s spouse Christina Charles (“Charles”) and 1% in Appellant. 7
Appellant later testified this ownership structure was part of a personal estate planning
strategy. 8
In June 2022, Appellees sued Appellant in California state court. 9 On February 17,
2023, Appellees obtained final judgments against Appellant totaling $4.4 million. 10 On
July 25, 2023, Appellant filed a voluntary chapter 7 petition in the United States
Bankruptcy Court for the District of Colorado. 11 His initial schedules listed his residence
as the Rose Mallow Property valued at $16,360.22 12 (1% of the scheduled value of
$1,636,021.50) and claimed a $175,000 homestead exemption under Colorado law. 13 He
later amended his Schedule C to claim the same exemption amount under California’s
homestead exemption. 14 Appellant also listed Dovenmuehle Mortgage as holding a
secured claim against the Rose Mallow Property in the amount of $1,156,801.22 on his
6 Id. at 1, in Appellant’s Am. App. at 717. 7 Id. at 8, 14, in Appellant’s Am. App. at 722, 728. 8 Tr. at 29–30, in Appellant’s Am. App. at 550-51. 9 Opinion and Order at 2, in Appellant’s Am. App. at 716. 10 Id. 11 Voluntary Petition at 1, in Appellant's Am. App at 6. 12 Schedule C at 1, in Appellant’s Am. App. at 29. 13 Id. 14 Amended Schedule C at 1, in Appellant’s Am. App. at 77. 3 BAP Appeal No. 24-21 Docket No. 65 Filed: 09/03/2025 Page: 4 of 23
Schedule D 15 and an encumbrance against the Rose Mallow Property with an additional
encumbrance held by PNC Bank in the amount of $267,493.00. 16
On October 25, 2023, Appellant filed a Motion to Abandon Interest in Property
Pursuant to 11 U.S.C. § 554(b) (the “Motion”), 17 arguing that the estate’s 1% interest in
the Rose Mallow Property was of inconsequential value. On November 13, 2023,
Appellees filed the Judgment Creditors’ Objection to the Debtor’s Claimed Exemptions
asserting Appellant could not use California exemptions. Subsequently, Appellees filed a
Supplement to Objection to Motion to Abandon Interest in Property Pursuant to 11
U.S.C. § 554(b) 18 arguing Appellant “converted his nonexempt property (cash) into the
claimed exempt property [Rose Mallow Property].” 19 Appellees also objected under
section 522(o) arguing that “the Bankruptcy Court should decrease the claimed
exemption by an amount equal to the converted property” entitling Appellant only to a $0
exemption. 20
Following the close of briefing, the Bankruptcy Court held an evidentiary hearing
on May 15, 2024, on the combined issues of abandonment and objections to
15 Schedule D at 2, in Appellant’s Am. App. at 32. 16 Id. at 3, in Appellant’s Am. App. at 33. Appellant indicated he was not personally liable on this debt. 17 Motion, in Appellant’s Am. App. at 79. 18 Supplement to Objection to Motion to Abandon Interest in Property Pursuant to 11 U.S.C. § 554(b), in Appellant’s Am. App. at 123. 19 Appellees’ Br. at 13. 20 Id. 4 BAP Appeal No. 24-21 Docket No. 65 Filed: 09/03/2025 Page: 5 of 23
exemptions. 21 Appellant testified in person, while his spouse, Charles, appeared by
videoconference from Spain, where the family had relocated as of January 2024. 22
Charles Wickstrom, a general accountant, also provided expert-witness testimony. 23
Jeffrey George, CPA, testified as an expert witness on behalf of Appellees. Both experts
offered testimony regarding transfers between Appellant’s and Charles’s personal and
business accounts in connection with the purchase of the Rose Mallow Property. 24
On September 5, 2024, the Bankruptcy Court entered its Opinion and Order
(“Order”), which (1) reduced Appellant’s claimed homestead exemption to $0 (“Order
Reducing Exemptions”) and (2) denied Appellant’s motion to abandon his interest in the
Rose Mallow Property as premature (“Order Denying Motion to Abandon”). In the
Order, the Bankruptcy Court found Appellant’s use of California law for exemptions was
proper pursuant to § 522(b) 25 and that Appellant had converted his nonexempt cash into
the Rose Mallow Property with intent to delay, hinder or defraud the Appellees pursuant
to § 522(o). 26
On September 13, 2024, Appellant filed a Motion for Reconsideration of Order,
which the Bankruptcy Court denied on October 24, 2024. On November 6, 2024,
Appellant appealed the Order.
21 Opinion and Order at 3, in Appellant’s Am. App. at 717. Prior to the hearing, the parties stipulated the current fair market value of the Rose Mallow Property was $1.6 million. Id. This left approximately $175,704 of equity in the Rose Mallow Property. 22 Id. at 4, in Appellant’s Am. App. at 718. 23 Id. 24 Id. 25 Id. at 4–5, in Appellant’s Am. App. at 718–19. 26 Id. at 12–14, in Appellant’s Am. App. at 726–28. 5 BAP Appeal No. 24-21 Docket No. 65 Filed: 09/03/2025 Page: 6 of 23
II. Jurisdiction
The BAP has jurisdiction to hear timely filed appeals from “final judgments,
orders, and decrees” of bankruptcy courts within the Tenth Circuit, unless a party elects
to have the district court hear the appeal. 27 No party elected to have the district court hear
this appeal. Appellant timely filed his notice of appeal from the Order. A prior BAP panel
determined “[t]he Order Denying Motion to Abandon . . . [was] interlocutory,” and
therefore only allowed “[the] appeal [to] proceed with respect to the Order Reducing
Exemptions.” 28 Accordingly, this Court has jurisdiction to review the Order Reducing
Exemptions.
III. Statement of Issues and Standard of Review
A review of Appellant’s brief indicates there are three issues on appeal:
1. Did the Bankruptcy Court erroneously find Appellant acted with intent to delay,
hinder, or defraud?
2. Did the Bankruptcy Court err in its interpretation and application of § 522(o)?
3. Did the Bankruptcy Court err in its application of the burden of proof?
A bankruptcy court’s interpretation and application of the Code is reviewed de
novo. 29 “De novo review requires an independent determination of the issues, giving no
special weight to the bankruptcy court’s decision.” 30 Accordingly, we give no deference
28 U.S.C. § 158(a)(1), (b)(1), and (c)(1); Fed. R. Bankr. P. 8003, 8005. 27
Order Allowing Appeal to Proceed in Part [BAP ECF No. 26] at 2. 28 29 In re Hesser, 984 F.2d 345, 348 (10th Cir. 1993). 30 In re Liehr, 439 B.R. 179, 182 (10th Cir. BAP 2010) (citing Salve Regina Coll. v. Russell, 499 U.S. 225, 238 (1991)). 6 BAP Appeal No. 24-21 Docket No. 65 Filed: 09/03/2025 Page: 7 of 23
to the Bankruptcy Court’s interpretation of § 522(o) and apply the same standard as the
Bankruptcy Court.
The BAP reviews a bankruptcy court’s finding of fact, including those regarding
intent, under a clearly erroneous standard. 31 “A finding of fact is ‘clearly erroneous’ if it
is without factual support in the record or if the appellate court, after reviewing all the
evidence, is left with a definite and firm conviction that a mistake has been made.” 32 A
party asserting a factual finding is clearly erroneous faces a high burden. This deferential
standard of review is based on the fact that a trial court is “in a superior position to judge
the witnesses’ credibility and the weight to be given their testimony, since the
[bankruptcy] court could see the witnesses when they testified and observe their
demeanor on the witness stand.” 33 “Accordingly, where there are two permissible views
of the evidence, the factfinder’s choice between them cannot be clearly erroneous.” 34
When a bankruptcy court’s factual determination is “plausible in light of the record
viewed in its entirety,” an appellate court may not reverse it “even though convinced that
had it been sitting as the trier of fact, it would have weighed the evidence differently.” 35
31 Gullickson v. Brown (In re Brown), 108 F.3d 1290, 1292 (10th Cir. 1997); Fed. R. Bankr. P. 8013. 32 Manning v. United States, 146 F.3d 808, 812 (10th Cir. 1998) (citing Cowles v. Dow Keith Oil & Gas, Inc., 752 F.2d 508, 511 (10th Cir. 1985)). 33 United States v. Robinson, 146 F. App’x 255, 259–60 (10th Cir. 2005) (unpublished) (citing United States v. Carr, 80 F.3d 413, 417 (10th Cir. 1996)). 34 Id. at 260 (citing Anderson v. City of Bessemer City, 470 U.S. 564, 574 (1985)). 35 Id. 7 BAP Appeal No. 24-21 Docket No. 65 Filed: 09/03/2025 Page: 8 of 23
IV. Analysis
A. Statutory Framework
The Code allows debtors to exempt certain property from the bankruptcy estate
under state or federal law. 36 States are permitted to opt-out of the federal exemptions and
limit a resident’s exemptions to those allowed under state law. 37 California, whose
exemptions apply, has opted out of the federal exemptions, so Appellant may claim
California state law exemptions, which include a homestead exemption. 38
Appellant’s ability to protect a home using state-specific homestead exemptions,
however, is not without limitation. Section 522(o) provides that “the value of an interest
in” homestead property shall be reduced to the extent that such value is attributable to
any portion of any property that Appellant (i) could not have been exempted; and (ii) that
has been disposed of in the 10-year period before the filing of the petition “with the intent
to hinder, delay, or defraud a creditor.” In other words, under § 522(o), if Appellant’s
conversion of nonexempt assets into homestead property was done with the intent to
hinder, delay, or defraud a creditor, “[Appellant’s] claim of exemption may be challenged
even though such conversion would not defeat the exemption under state law.” 39
36 11 U.S.C. § 522(b). 37 Id. See also In re Tucker, No. 24-cv-304-CNS, 2025 WL 926485, at *2 (D. Colo. Mar. 27, 2025) (citing 11 U.S.C. § 522(b)). 38 The Bankruptcy Court found California exemptions apply, and Appellant does not challenge that finding on appeal. Order at 6, in Appellant’s Am. App. at 720; Cal. Civ. Proc. Code §§ 703.130, 704.730 (West 2024); In re Mulch, 182 B.R. 569, 572 (Bankr. N.D. Cal. 1995). 39 4 Collier on Bankruptcy ¶ 522.08[5] (Richard Levin & Henry J. Sommer eds., 16th ed.) (Section 522(o) applies to “the conversion through the sale, transfer or other 8 BAP Appeal No. 24-21 Docket No. 65 Filed: 09/03/2025 Page: 9 of 23
“In light of Congress’ adoption in section 522(o) of the identical ‘intent to hinder,
delay or defraud’ language found in section 548(a)(1)(A) and section 727(a)(2),
[bankruptcy courts] [have] look[ed] to case law under these sections for guidance in
construing the requisite intent under section 522(o).” 40 Thus, Appellant’s “exemptible
interest in homestead property should not be reduced absent a specific intent on the part
of [Appellant] to defraud a creditor, and this intent must involve actual rather than
constructive intent.” 41
“Because rare is the occasion when a party lays bare his or her subjective intent,
‘[f]raudulent intent . . . may be established by circumstantial evidence, or by inferences
drawn from a course of conduct.’” 42 Thus, a party asserting an objection to exemptions
based on § 522(o) may attempt to prove actual fraud by relying upon circumstantial
evidence including the existence of any “badges of fraud.” 43 These badges of fraud may
include the following:
1. The transfer or obligation was to an insider; 2. Debtor retained possession or control of the property transferred after the transfer; 3. The transfer or obligation was disclosed or concealed; 4. Before the transfer was made or obligation was incurred, Debtor had been sued or threatened with suit; 5. The transfer was of substantially all Debtor’s assets; 6. Debtor absconded;
disposition of nonexempt property into exempt homestead property with fraudulent intent.”). 40 Id. (citing In re Addison, 540 F.3d 805 (8th Cir. 2008); In re Stanton, 457 B.R. 80 (Bankr. D. Nev. 2011)). 41 Id. (citing In re Agnew, 355 B.R. 276 (Bankr. D. Kan. 2006)). 42 In re Warren, 512 F.3d 1241, 1249 (10th Cir. 2008) (quoting Farmers Coop Ass’n v. Strunk, 671 F.2d 391, 395 (10th Cir. 1982)). 43 Id. See also In re Taylor, 133 F.3d at 1338–39 (relying on badges of fraud enumerated in the Uniform Fraudulent Transfer Act to assess fraudulent intent). 9 BAP Appeal No. 24-21 Docket No. 65 Filed: 09/03/2025 Page: 10 of 23
7. Debtor removed or concealed assets; 8. The value of the consideration received by Debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred; 9. Debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred; 10. The transfer occurred shortly before or shortly after a substantial debt was incurred; 11. Debtor transferred the essential assets of the business to a lienor who transferred the assets to an insider of Debtor. 44
Assessing fraudulent intent is a ‘“peculiarly fact-specific’” endeavor and ‘“the
activity in each situation must be viewed individually.’” 45 Federal Rule of Bankruptcy
Procedure 4003(c) 46 provides a party objecting to an exemption has the initial burden of
proving any exemptions are not properly claimed. 47 In the Tenth Circuit, this means:
“[i]nitially . . . the objecting party has the burden of production and persuasion. If the
objecting party can produce evidence to rebut the exemption, the burden then shifts back
to the debtor to come forward with evidence to demonstrate that the exemption is
proper.” 48 The standard of proof for an objection to an exemption is a preponderance of
the evidence. 49 This Court has also held, in the context of § 522(o), that the objecting
44 See Cal. Civ. Code § 3439.04(b) (West 2024). The badges of fraud enumerated in the California Uniform Voidable Transactions Act are the same as those found in the Colorado Fraudulent Transfers Act, Colo. Rev. Stat. § 38-8-105(2). As a result, it is immaterial which grouping of badges of fraud is cited. 45 In re Warren, 512 F.3d at 1250 (quoting Marine Midland Bus. Loans, Inc. v. Carey (In re Carey), 938 F.2d 1073, 1077 (10th Cir. 1991)). 46 All future references to “Rules” refer to the Federal Rules of Bankruptcy Procedure. 47 Fed. R. Bankr. P. 4003(c). 48 Gregory v. Zubrod (In re Gregory), 245 B.R. 171, 174 (10th Cir. BAP 2000) (citing Carter v. Anderson (In re Carter), 182 F.3d 1027, 1029 n.3 (9th Cir. 1999)). 49 See Grogan v. Garner, 498 U.S. 279, 291 (1991); In re Agnew, 355 B.R. 276, 284 (Bankr. D. Kan. 2006). 10 BAP Appeal No. 24-21 Docket No. 65 Filed: 09/03/2025 Page: 11 of 23
party has burden to show how the “value of [the] interest in” the property should “be
reduced.” 50
B. The Bankruptcy Court Did Not Clearly Err in Finding Appellant Acted with Intent to Hinder, Delay, or Defraud Creditors.
a. The Bankruptcy Court’s Findings
The Bankruptcy Court found Appellant acted with intent to hinder, delay, or
defraud creditors under § 522(o) based on multiple “badges of fraud.” 51 Specifically, the
Bankruptcy Court, after considering the badges of fraud, found:
(a) The Rose Mallow Property was acquired through the mortgage obtained solely in [Appellant’s] name and the evidence established the funds used for the balance of the purchase price can be traced to [Appellant’s] nonexempt property. The title was vested in Charles, an insider. (b) The evidence established [Appellant] resided in the Rose Mallow Property after the transfer was made. (c) [Appellant] concealed his true interest in the Rose Mallow Property by only retaining a 1% ownership interest despite providing all of the funds used to purchase the property. [Appellant] also attempted to conceal the source of the funds used for the down-payment by transferring the funds to accounts held by Charles. There was no evidence Charles used her own assets for the down payment. (d) At the time of the transfer, [Appellant] was subject to the personal guarantees of the promissory notes to [Appellees], which had become unsecured after the primary obligor, Rantaman, filed bankruptcy and the development property securing the obligation was foreclosed upon by the senior lender. (e) The conveyance of the 99% interest in the Rose Mallow Property was in furtherance of the “estate planning strategy” to transfer substantially all of the [Appellant’s] assets to Charles. In this regard, [Appellant] produced no evidence that he had engaged professionals to prepare a formal estate planning strategy memorialized by a will and/or trust. (f) [Appellant] and Charles have moved to Spain. (g) The “estate planning strategy” is an attempt to conceal assets. (h) [Appellant] did not receive reasonably equivalent value for the transfer of the 99% interest in the Rose Mallow Property because he provided the entire purchase price.
50 In re Willcut, 472 B.R. 88, 97 (10th Cir. BAP 2012). 51 Order at 13–14, in Appellant’s Am. App. at 727–28. 11 BAP Appeal No. 24-21 Docket No. 65 Filed: 09/03/2025 Page: 12 of 23
(i) At the time of the transfer, [Appellant] admitted he was not solvent, and, in fact, [Appellant] became insolvent after the transfer of his ownership interest in the Rose Mallow Property to Charles. (j) At the time the transfer occurred, the personal guarantees were triggered by the failure of the Rantaman development project. 52
The Bankruptcy Court also found Appellant was the source of the funds used to
purchase the Rose Mallow Property and that those funds were nonexempt. 53 Although
Charles made down-payments totaling $120,000 from her personal accounts, the
Bankruptcy Court credited the testimony of Appellees’ expert, Jeffrey George, who
traced the origin of those funds to accounts previously owned or controlled by Appellant
or his former business. 54 The Bankruptcy Court further found Appellant was insolvent at
the time of the transaction and that the funds were intentionally funneled through
Charles’s accounts to obscure Appellant’s role in the purchase. 55
The Bankruptcy Court further made specific credibility findings. It found
Appellant’s testimony “inconsistent, at times evasive, and generally, not credible,” and
concluded that Charles was combative and uncooperative in her remote appearance. 56 It
emphasized the timing of the transaction, which occurred shortly after Appellant became
personally liable for more than $1 million in debt to Appellees. 57 The Bankruptcy Court
found that beginning in 2018, Appellant implemented a last-minute “estate planning
52 Id. 53 Id. at 13, in Appellant’s Am. App. at 727. Despite only holding a 1% legal interest, Appellant continued to reside in and control the Property. 54 Id. at 11, in Appellant’s Am. App. at 725. 55 Id. at 13–14, in Appellant’s Am. App. at 727–28. 56 Id. at 4, in Appellant’s Am. App. at 718. 57 Id. at 10–13, in Appellant’s Am. App. at 724–27. 12 BAP Appeal No. 24-21 Docket No. 65 Filed: 09/03/2025 Page: 13 of 23
strategy” to transfer 99% ownership of several properties to Charles while retaining
control over the finances, including in connection with the Rose Mallow Property. 58
Based on the totality of the circumstances, the Bankruptcy Court concluded Appellant
acted with intent to hinder or delay creditors within the meaning of § 522(o).
b. Appellant’s Arguments
Appellant argues the Bankruptcy Court made multiple erroneous factual findings.
Appellant contends the Bankruptcy Court erred in finding he acted with the intent to
hinder, delay, or defraud creditors. 59 He argues the Bankruptcy Court relied on
circumstantial evidence and gave undue weight to the so-called badges of fraud. 60 He
maintains the ownership structure with Charles (wherein Appellant owned 1% and
Charles owned 99%) reflected a longstanding personal arrangement, not an effort to
mislead creditors. 61
Appellant further asserts the Bankruptcy Court mischaracterized his insolvency
claiming his remarks referred to a business entity—not his personal finances. 62 He also
challenges the Bankruptcy Court’s adverse credibility determinations arguing it wrongly
discounted his expert, Wickstrom, and erred in crediting George’s tracing analysis, which
he contends was incomplete. 63
Id. at 10, in Appellant’s Am. App. at 724. 58
Appellant’s Am. Opening Br. at 21. 59 60 Id. at 23. 61 See Tr. at 29:9–16 in Appellant’s Am. App. at 550; cf. Order at 4 in Appellant’s Am. App. at 718 (finding Appellant’s testimony inconsistent and not credible). 62 Appellant’s Am. Opening Br. at 27. 63 Id. at 29-30. 13 BAP Appeal No. 24-21 Docket No. 65 Filed: 09/03/2025 Page: 14 of 23
Appellant also maintains he “did not take the funds in dispute and funnel them into
an existing mortgage for the purpose of concealing them,” 64 and that prebankruptcy
exemption planning does not, on its own, establish the fraudulent intent required under
§ 522(o)—there must be evidence of extrinsic fraud. 65
c. Analysis
First, Appellant’s assertion the Bankruptcy Court erred in finding intent to hinder,
delay, or defraud creditors under § 522(o) is unpersuasive. Appellant relies on cases such
as Addison, Sholdan, and Hanson to suggest that exemption planning alone is not
sufficient to establish fraudulent intent. But the Bankruptcy Court did not base its ruling
solely on exemption planning. Rather, it conducted a detailed, fact-specific analysis of
multiple badges of fraud, each grounded in the evidentiary record. 66
64 Id. at 19. 65 Appellant relies on the following three cases for this proposition: In re Sholdan, 217 F.3d 1006, 1010–11 (8th Cir. 2000) (affirming denial of homestead exemption where debtor liquidated nearly all nonexempt assets and purchased a new house shortly before filing; holding there was ample extrinsic evidence of fraudulent intent and distinguishing permissible conversion from acquiring a house “for no other reason than to defraud creditors”); In re Addison, 540 F.3d 805, 811–17 (8th Cir. 2008) (discussing application of fraud under § 522(o) in the context of mortgage paydown and Roth IRA contributions, but reversing reduction of homestead exemption based on extrinsic evidence of fraud); and In re Hanson, 848 F.2d 866, 868–70 (8th Cir. 1988) (affirming allowance of exemptions where debtors sold property to family members for fair market value and used proceeds to buy life insurance and prepay homestead mortgage before filing bankruptcy; holding that “mere conversion of nonexempt property to exempt property, without more, will not deprive the debtor of the exemption” and that sale to family members, standing alone, was not extrinsic evidence of fraud). These cases undermine Appellant’s position rather than support it. 66 Order at 12–14, in Appellant’s Am. App. at 726–28. At oral argument, Appellant suggested the Bankruptcy Court’s ruling was inconsistent with 11 U.S.C. § 522(p). Section 522(p) imposes a statutory limit on the value of a debtor’s homestead exemption when the debtor acquired the interest in the property within 1,215 days prior 14 BAP Appeal No. 24-21 Docket No. 65 Filed: 09/03/2025 Page: 15 of 23
Next, it does not appear the Bankruptcy Court erred in finding Appellant was the
true source of the $309,095.34 used to purchase the Rose Mallow Property. The
Bankruptcy Court credited the testimony of Appellees’ expert, Jeffrey George, who
traced all four down payment transactions—$20,000 on January 27, 2021; $80,000 on
June 23, 2021; $20,000 on July 14, 2021; and $189,095.34 on February 16, 2022—to
funds originating from Appellant’s business or personal accounts. 67 The Bankruptcy
Court found this tracing persuasive and matched several transactions in both amount and
timing to corresponding deposits into the accounts. 68 In contrast, Appellant’s expert,
Wickstrom, reviewed bank statements but did not ascertain the source of deposits into the
to the date of the bankruptcy petition. See 11 U.S.C. § 522(p)(1). If applicable, the provision caps the allowable homestead exemption at a fixed dollar amount—currently $189,050. In re Willcut, 472 B.R. 88, 92–93 (10th Cir. BAP 2012). Section 522(p) applies only to property acquired within the 1,215-day period and is triggered automatically upon those facts. It is designed to prevent debtors from converting non- exempt assets into homestead equity, regardless of the debtor’s intent, and operates as a bright-line temporal restriction in jurisdictions that opt out of the federal exemption scheme. See 11 U.S.C. § 522(b)(3)(A); In re Greene, 583 F.3d 614, 624–25 (9th Cir. 2009) (holding that the § 522(p) cap applies only when a debtor acquires title to property within 1,215 days of filing; a homestead declaration filed within that period is a classification, not the acquisition of an interest, and therefore does not trigger the cap). Although § 522(p) was cited in Appellant’s opening brief, Appellant did not develop the argument as an independent basis for reversal and thus forfeited the argument. See Bronson v. Swensen, 500 F.3d 1099, 1104 (10th Cir. 2007) (“[W]e routinely have declined to consider arguments that are . . . inadequately presented, in an appellant’s opening brief.”). Even if we were to consider this argument, the Bankruptcy Court made no findings under § 522(p), and the homestead exemption claimed did not exceed the statutory cap. Accordingly, § 522(p) was not triggered. The Bankruptcy Court reduced the exemption under § 522(o), which targets fraudulent conversions regardless of the exemption amount, and § 522(p) does not preclude such a ruling. 67 Order at 10–11, in Appellant’s Am. App. at 724–25. 68 Id. 15 BAP Appeal No. 24-21 Docket No. 65 Filed: 09/03/2025 Page: 16 of 23
accounts. 69 The Bankruptcy Court reasonably concluded that Wickstrom’s opinion lacked
weight, particularly given his lack of forensic credentials and the presence of conflicting
documentation. The Bankruptcy Court also rejected Appellant’s assertion the
$189,095.34 wire transfer was merely a temporary reimbursement. 70 It found no
supporting evidence for that claim and emphasized the inconsistency between
Appellant’s testimony and a signed gift letter submitted to the lender, in which Charles
stated the funds were a gift to Appellant. 71
Additionally, the Bankruptcy Court did not err in finding Appellant was insolvent.
Appellant testified that CMR Holdings was insolvent at the time of the transfers, and the
Bankruptcy Court reasonably treated this testimony, when considered with the overall
record, as evidence of Appellant’s own insolvency. 72 CMR Holdings, a closely held
entity owned 99% by Appellant’s spouse and 1% by Appellant, held the other real estate
assets in question. 73 The Bankruptcy Court’s finding was further supported by
Appellant’s own schedules and the allowance of claims in the bankruptcy case totaling
over $1.1 million.
69 Id. at 4, in Appellant’s Am. App. at 718 (finding Wickstrom’s testimony “not particularly useful” because he failed to trace the sources of deposits). 70 Id. at 11–12, in Appellant’s Am. App. at 725–26. 71 Id. at 11, in Appellant’s Am. App. at 725. 72 Tr. 30:12–31:9, in Appellant’s Am. App. at 551–52. See also Order at 14, in Appellant’s Am. App. at 728 (“At the time of the transfer, the Debtor admitted he was not solvent, and, in fact, the Debtor became insolvent after the transfer of his ownership interest in the Rose Mallow Property to Charles.”). 73 Order at 3, in Appellant’s Am. App. at 717. 16 BAP Appeal No. 24-21 Docket No. 65 Filed: 09/03/2025 Page: 17 of 23
Appellant’s argument the Bankruptcy Court conflated combativeness with
untruthfulness is also not persuasive. The Bankruptcy Court’s adverse credibility
determinations are also entitled to deference. It found Appellant’s testimony
“inconsistent, at times evasive, and generally, not credible,” 74 and determined that
Charles’s remote testimony was combative and uncooperative. The Bankruptcy Court
reasonably concluded Appellant and Charles’s statements were contradicted by the
documentary record, including bank records and the gift letter. The Bankruptcy Court is
in the best position to assess witness credibility and the weight to be given their
testimony having observed demeanor while testifying and consistency throughout the
proceedings. 75
Although Appellant argues the evidence supports different factual inferences, the
clearly erroneous standard does not permit an appellate court to substitute its own
judgment. Where two permissible views of the evidence exist, the trial court’s choice
between them must stand. 76 The Bankruptcy Court’s findings are well supported by the
record and “plausible in light of the record viewed in its entirety.” 77 Furthermore, the
74 Id. at 4, in Appellant’s Am. App. at 718. 75 See United States v. Carr, 80 F.3d 413, 418 (10th Cir. 1996) (emphasizing that trial courts are “in a superior position to judge the witnesses’ credibility and the weight to be given their testimony.”). 76 See Anderson v. City of Bessemer City, 470 U.S. 564, 574 (1985) (“Where there are two permissible views of the evidence, the factfinder’s choice between them cannot be clearly erroneous.”) (citing United States v. Yellow Cab Co., 338 U.S. 338, 342 (1949); In re Johnson, 477 B.R. 156, 168 (10th Cir. BAP 2012) (explaining the standard for clear error). 77 United States v. Robinson, 146 F. App’x. 255, 260 (10th Cir. 2005) (unpublished) (quoting Anderson, 470 U.S. at 574). 17 BAP Appeal No. 24-21 Docket No. 65 Filed: 09/03/2025 Page: 18 of 23
record does not support a definite and firm conviction that mistakes have been made.
Thus, Appellant has not demonstrated any of the Bankruptcy Court’s factual findings
were clearly erroneous.
C. The Bankruptcy Court Properly Interpreted and Applied § 522(o).
The Bankruptcy Court acknowledged § 522(o) serves as a statutory exception to
the general rule that exemptions are not subject to surcharge for debtor misconduct. 78
Specifically, the Bankruptcy Court concluded that Ҥ 522(o) is a specific statute which
measures whether an exemption can be claimed by a debtor and allowed by the court if a
debtor converts non-exempt property into exempt property with the intent to hinder,
delay, or defraud creditors.” 79 Appellant argues the Bankruptcy Court misinterpreted
§ 522(o) by applying it to the acquisition of “title” in a new homestead, rather than
limiting it to situations where a debtor enhances equity in an already-owned home. 80
According to Appellant, the statute addresses only the “value of an interest,” not the act
of acquiring property. 81 Thus, he claims § 522(o) does not apply to a down payment or
purchase of a new residence, even if the funds used were nonexempt and the purchase
was made with fraudulent intent. 82
78 Order at 8 (citing Law v. Siegel, 571 U.S. 415 (2014)), in Appellant’s Am. App. at 722. Id. at 8–9, in Appellant’s Am. App. at 722–23. 79
Appellant’s Am. Opening Br. at 8, 17, 20. 80 81 Id. at 17. 82 Appellant’s Am. Opening Br. at 17, 19 (arguing that § 522(o) “limits the increase of ‘value’ prior to filing” and “does not deal with the acquisition of a new home that is, acquisition of ‘title,’” and further asserting that Appellant “used the funds in 18 BAP Appeal No. 24-21 Docket No. 65 Filed: 09/03/2025 Page: 19 of 23
But this interpretation finds no support in the statute’s text or purpose. Section
522(o) provides that “the value of an interest” in real or personal property claimed as a
homestead “shall be reduced to the extent that such value is attributable to” the
conversion of nonexempt property made with the intent to hinder, delay, or defraud
creditors within ten years before filing bankruptcy. 83 The statute does not limit its
application to increases in value from mortgage paydowns or improvements to an
existing home. Rather, it targets any transaction that converts nonexempt assets into
exempt homestead value—whether through increasing equity in a new home, acquiring a
new property, or otherwise. 84
The Court’s decision in In re Willcut supports this interpretation. There, the court
interpreted the phrase “value of an interest” to mean a debtor’s “economic equity” in real
property and emphasized that § 522(o) applies when that equity is “attributable” to a
fraudulent conversion of nonexempt assets. 85 While the facts in Willcut involved an
existing home, nothing in the decision limits § 522(o)’s reach to only that context.
Instead, the Court made clear “[t]he subsection refers to ‘the value of an interest,’ which
dispute to purchase a home” rather than “funnel them into an existing mortgage for the purpose of concealing them”). 83 11 U.S.C. § 522(o)(4) (providing for reduction of homestead exemption where “value is attributable to the conversion of nonexempt property” made with intent to hinder, delay, or defraud creditors within ten years before filing). 84 See In re Willcut, 472 B.R. 88, 93 (10th Cir. BAP 2012) (“The subsection refers to ‘the value of an interest,’ which implies a monetary interest—equity, not title.”); id. at 94 (Section 522(o) “was enacted to prevent the fraudulent attempt to build up equity in a homestead” explaining that § 522(o) was enacted to prevent debtors from converting nonexempt assets into exempt homestead equity.) 85 Id. at 97–98. 19 BAP Appeal No. 24-21 Docket No. 65 Filed: 09/03/2025 Page: 20 of 23
implies a monetary interest—equity, not title.” 86 Thus, the purchase of a new home with
nonexempt funds immediately creates equity subject to reduction under § 522(o) if done
with fraudulent intent. 87
Congress’s purpose in enacting § 522(o) also undercuts Appellant’s argument.
Although often referred to as addressing the “mansion loophole,” the statute’s application
is not limited to mansions. Rather, § 522(o) was enacted to prevent debtors—particularly
in states with unlimited or generous homestead exemptions—from converting nonexempt
assets into exempt homestead equity before filing bankruptcy. 88 Courts have held that
§ 522(o) applies regardless of whether the property is newly acquired or preexisting, and
regardless of its value, so long as the equity is attributable to a fraudulent conversion of
nonexempt assets. 89 Interpreting § 522(o) as inapplicable to newly acquired homes would
revive the very abuse the statute was intended to prevent—permitting debtors to shield
86 Id. at 95. 87 See Order Denying Motion for Reconsideration of Order at 3–4, in Appellant’s App. at 748–49 (Bankruptcy Court rejecting Appellant’s argument that § 522(o) is limited to improvements on existing homesteads and applying it to equity resulting from purchase of new property). 88 See H.R. Rep. No. 109-31, pt. 1, at 15-16 (2005) (noting that § 522(o) was added to close the so called “mansion loophole” by requiring reduction of a homestead exemption to the extent its value is attributable to the fraudulent conversion of nonexempt assets within ten years of filing); In re Willcut, 472 B.R. at 94 (noting both § 522(o) and § 522(p) were enacted to close the “mansion loophole”). 89 See In re Presto, 376 B.R. 554, 572 (Bankr. S.D. Tex. 2007) (“The scope of the statute is limited to the value in a debtor's homestead that is ‘attributable’ to nonexempt property that was fraudulently converted into equity in the homestead.”); In re Agnew, 355 B.R. 276, 278–82, 284–85 (Bankr. D. Kan. 2006) (applying § 522(o) where debtors used nonexempt assets to acquire a new homestead). 20 BAP Appeal No. 24-21 Docket No. 65 Filed: 09/03/2025 Page: 21 of 23
assets simply by purchasing a new property rather than improving an existing one. Courts
have rejected such formalistic distinctions in favor of a substance-over-form approach. 90
In sum, Appellant’s reading of § 522(o) is contrary to the statute’s plain text,
undermines its purpose, and is unsupported by precedent. The Bankruptcy Court
correctly rejected Appellant’s title-based distinction and applied § 522(o) to reduce the
homestead exemption based on its finding that Appellant used nonexempt funds to
acquire equity in a new home with intent to hinder or delay creditors.
D. The Bankruptcy Court Correctly Applied the Burden of Proof.
At the evidentiary hearing, the Bankruptcy Court stated:
[T]he debtor has the burden of proof on the motion to abandon and also, as cited in the judgment creditor’s brief, the burden of persuasion on the right to an exemption. So, I think this is really the debtor’s presentation. 91
In its Order, the Bankruptcy Court correctly noted that under Rule 4003(c), the party
objecting to an exemption bears the initial burden of proving that the exemption is not
properly claimed. The Bankruptcy Court further explained that if the objecting party
comes forward with evidence sufficient to rebut the presumptive validity of the
90 See Presto, 376 B.R. at 568; See In re Sholdan, 217 F.3d 1006, 1011 (8th Cir. 2000) (affirming denial of homestead exemption where debtor liquidated nonexempt assets and purchased new home in contemplation of bankruptcy with intent to defraud creditors). 91 Tr. at 12:6–9, in Appellant’s Am. App. at 270. As to the Appellees’ Objection to the claimed Exemptions, the Order also provided, “. . . the objecting party has the initial burden of proving the exemptions are not properly claimed. If the objecting party produces evidence sufficient to rebut the exemption, the burden shifts to the Debtor to produce evidence demonstrating that the exemption is proper, but the burden of persuasion remains with the objecting party.” Order at 5–6, in Appellant’s Am. App. at 719–20. 21 BAP Appeal No. 24-21 Docket No. 65 Filed: 09/03/2025 Page: 22 of 23
exemption, the burden of production shifts to the debtor to support the exemption. 92
However, the burden of persuasion remains with the objecting party throughout. Finally,
the Bankruptcy Court determined that parties “seeking to reduce the exemption amount
[pursuant to § 522(o)] bear the burden of proof.” 93
Appellant contends the Bankruptcy Court erroneously shifted the burden of proof
during the evidentiary hearing and thus prejudiced him. While the Bankruptcy Court
incorrectly stated the burden of proof at the hearing, it does not constitute reversible
error. In the Order, the Bankruptcy Court accurately articulated the governing burden of
proof standard under Rule 4003(c), which provides: “In a hearing under this Rule 4003,
the objecting party has the burden of proving that an exemption was not properly
claimed.” 94 Additionally, under this rule, once the objecting party introduces evidence
sufficient to rebut the presumed validity of the exemption, the burden of production shifts
to the debtor, but the burden of persuasion remains with the objector. This standard is
well established in the Tenth Circuit. 95
Moreover, the Bankruptcy Court’s detailed analysis throughout the Order reflects
a correct understanding and application of this burden-shifting framework. The
92 Order at 5–6, in Appellant’s Am. App. at 719–20. 93 Id. at 9, in Appellant’s Am. App. at 723. 94 Fed. R. Bankr. P. 4003(c). 95 See, e.g., In re Hodes, 402 F.3d 1005, 1010 (10th Cir. 2005) (addressing the Kansas homestead exemption and concluding the “objecting party bears the burden of proof on an objection to a claimed exemption” by a “preponderance of the evidence”); In re Lampe, 331 F.3d 750, 754 (10th Cir. 2003) (“Once a debtor claims an exemption, the objecting party bears the burden of proving the exemption is not properly claimed.”). 22 BAP Appeal No. 24-21 Docket No. 65 Filed: 09/03/2025 Page: 23 of 23
Bankruptcy Court expressly stated, “[t]he Judgment Creditors, seeking to reduce the
exemption amount, bear the burden of proof,” and identified the standard of proof as a
preponderance of the evidence. 96 It then proceeded through a detailed analysis evaluating
whether the objecting parties rebutted the exemption, whether Appellant presented
responsive evidence, and whether the objectors ultimately satisfied their burden of
persuasion. 97
Because the Bankruptcy Court’s written ruling correctly stated and applied the
governing standard, any earlier misstatement during the hearing was harmless error. 98
Here, the record confirms that the Bankruptcy Court reached its decision through a proper
evidentiary framework and without impermissibly shifting the burden to Appellant.
V. Conclusion
The Bankruptcy Court made no erroneous factual findings and did not err as a
matter of law in its interpretation and application of § 522(o). Although the Bankruptcy
Court misstated the burden of proof at the evidentiary hearing, such error was harmless as
the court correctly articulated and applied the correct standard in its Order when it made
its decision. Accordingly, we AFFIRM.
96 Order at 9, in Appellant’s Am. App. at 723. 97 Id. at 6–14, in Appellant’s Am. App. at 720–28. 98 United States v. Collins, 575 F.3d 1069, 1073 (10th Cir. 2009) (“A harmless error is one that does not have a substantial influence on the outcome of the trial; nor does it leave one in grave doubt as to whether it had such effect.”) (internal citation omitted). 23