Free Essay

In Re Romano (2006) 353 B.R. 738; 2006 Bankr

In: Business and Management

Submitted By gjalilian
Words 604
Pages 3
Case name, Citation, and Court: In re Romano (2006) 353 B.R. 738; 2006 Bankr. LEXIS 2953

Key Facts: a) Kevin J. Farley ("Farley") was a certified public who employed in Allstate and ultimately became a fifty-percent shareholder of Allstate Carting, Inc. b) The Debtor/Defendant, Phillip A. Romano was the President and other fifty-percent shareholder of Allstate. c) While engaged as a consultant, Farley became aware of the Romanos' practice of writing checks for personal expenses out of the company account. d) Allstate was in financial difficulty and failed to pay substantial debt to its unsecured creditors, while at the same time the Romanos withdrew large sums of money from Allstate. e) Romano filed a Chapter 7 bankruptcy petition in the District of Massachusetts. f) Farley filed an Amended Complaint against Romano and his wife and individually and on behalf of Allstate, seeks to except a debt he asserted was owed by the Romanos from discharge. g) Farley also argued that the Romanos' withdrawal of substantial sums from Allstate's checking account for personal expenses amounts to embezzlement under 11 U.S.C. ß 523(a)(4). * Issue:
The issue was, whether or not any debt owed by the Romanos to Farley or to Allstate was non-dischargeable pursuant to 11 U.S.C.S. ß 523(a)(2) and ß 523(a)(4).

Section 523(a)(4) of the Bankruptcy Code provides that a debtor may not discharge debt for embezzlement or larceny. Also Section 11 U.S.C.S. ß 523(a)(2) sates that a debt shall be excepted from discharge, when it is the result of debtor’s false statement, made with knowledge of its falsify, with the intent to deceive the creditor, and where the creditor justifiably relies on the representation to its detriment.

Analysis :
The Court held that: a) No express trust existed with respect to Mr. Romano's fiduciary duty to Farley and he did not hold a position of ascendancy over Farley. Additionally Mrs. Romano was never an officer or shareholder of Allstate, and therefore owed no fiduciary duties to the corporation or to Farley. b) As Controller, Farley had a duty to exert his authority to obtain appropriate controls over the company's finances and there was no evidence that Romano prevented Farley from performing his duties. c) Farley failed to satisfy his burden of proof with respect to the elements 11 U.S.C. ß 523(a)(2)(A) and court did not find that Romano committed fraud or a defalcation while acting in a fiduciary capacity vis a vis Farley. d) The Debtors were liable under ß 523(a)(4) for embezzlement because the husband, with his wife's assistance, systematically and dramatically increased the level of withdrawals from the company. e) While Romano was entitled to the reasonable value of his services, he was not entitled to dramatically increase his compensation in a thinly disguised attempt to recoup his capital contributions and the circumstances established that they embezzled funds from Allstate. f) Farley failed to demonstrate that Romano's alleged promises to personally guarantee his unpaid loans constituted false representations upon which he could justifiably rely. Also he failed to implement or maintain any systems to ensure that Allstate's checking accounts were used exclusively for business purposes.

Conclusion: The Court entered a judgment in favor of Allstate and against the Romanos for embezzlement with respect to the excessive compensation obtained by Romano and Mrs. Romano, the court also held that creditor failed to establish that the conduct of debtors warranted a finding of fraud or defalcation while acting in a fiduciary capacity.…...

Similar Documents

Free Essay

Mittal Steel 2006

...By 2006, Mittal Steel was one of the top producers of steel in the world. They earned their place within the industry by acquiring smaller steel companies and set standard practice as to how they acquire and manage these companies. These standards changed how business is done in the steel industry. These changes have produced consolidation, better efficiency, and restructuring, which has allowed Mittal to profit as global producer. Before Mittal Steel, most steel companies produced steel for their regions and many were losing millions of dollars yearly. Even though there was a need for steel all over the world, the shipping and tariffs cost were too high to provide services to international customers. Mittal saw an opportunity to capitalize on this by purchasing companies throughout the world to take the steel industry out of the regional market and into a global market. This would stop the bottleneck problems that industry faced due to local suppliers not being able to fulfill their demand and allow them more access to different suppliers. (Globalization, Kotler, 15). During the 80’s, many steel plants were state owned, which meant there was basically no growth or development within the industry. Mittal saw this, so instead of spending millions of dollars to build new facilities, they bought under preforming state owned companies which moved them into private ownership (Privatization, Kotler, 15). Mittal also invest in an older technology called, DRI, which was...

Words: 700 - Pages: 3

Premium Essay

3m in 2006

...3M in 2006 Prior to reading the 3M case, I was unaware of this historic corporation that dominates a wide range of markets today. I have heard and purchased products such as Post-it Note, Scotch Tape, and Scotch-Brite; however, I did not know all these products and many more belong to 3M Company. 3M was initiated in 1902 by five businessmen in Minnesota and its first product was the development of sandpaper. William McKnight was the leading figure and CEO of 3M who revolutionized the company and led it to its initial success. He and other prominent figures at that time evolved the company culture into a unique innovative organization. 3M was the first company to utilize various strategies that differentiated them from other organizations at the time. For instance, they applied product diversification, which was done by creating brand extensions, production modifications, or creating brand new products. A large number of ground-breaking products were created by, “leveraging existing technology and applying it to new areas”. (p. C437) This strategy was not common in other industries during that time period. This unique culture assisted 3M by allowing the company to reach out to markets their competitors could not have access too. This advantage gave 3M the opportunity to acquire a wide range of new consumers across different market sectors. It placed them as the top dog in supplying daily essentials for individuals, families, manufacturers, and suppliers. Another......

Words: 633 - Pages: 3

Premium Essay

Huffman Trucking 2005 and 2006

...Huffman Trucking | | |Income Statement | |For the Year Ended, December 31, 2006 | |(In Thousands) | |  |  |  |  |  | |  |Horizontal Analysis | |  |2006 |2005 | Change in $ |Change in % | |Revenue | 879,944 | 807,288 | 72,656 |9% | |  |  |  |  |  | |Operating Expenses |  |  |  |  | |  |  |  |  |  | |Salaries, Wages & Benefits | 353,739 | 330,597 | 23,142 |7% | |Fuel Expense | ...

Words: 831 - Pages: 4

Premium Essay

Starbuck’s Quest 2006

...\ Starbuck’s Quest 2006 A SWOT analysis address the components of the organization’s environment which is internal strengths and weaknesses, and external opportunities and threats. Strength we capitalize on them and Weaknesses we shore up. As for opportunities we invest in, and threats we identify. Data that are used for Internal components are customer feedback , employee information , Capabilities, Resources, Processes. Data that are used for external components are secondary data, environment, industry , competitive ,customer feedback primary. The reason behind achieving these organizational components are to achieve ideas which result in organizational goal statement. Goal statement are derived by (Opportunities +threats), strengths-weaknesses, Strength vs opportunities. One great example of a mega organization that we can use the SWOT analysis on is “Starbucks Global Quest 2006”. Starbucks was established in 1971 in Seattle, Washington. This company is famous for its quality fresh roasted coffee and friendly atmosphere. The company sits on over 9,000 stores worldwide. It’s product lines include beverages (coffee, Tazo tea, soda, juices),pastries, whole coffee beans, coffee-related hardware and equipment, merchandise (mug, CDs) In 1971 Starbucks Coffee, Tea, and Spice store (coffee bean roasting) opened in Seattle’s Pike Place Market. 1982 A man called Howard Schultz joined Starbucks. 1986 Howard Schultz established “Il Giornale......

Words: 1028 - Pages: 5

Premium Essay

Sensex 2006

...What has changed is the external situation. Oil prices have fallen as winter demand seems to have been accounted for. The US Federal Reserve has also indicated that it may cease raising interest rates in the near future. All these factors have managed to renew investor confidence in equities across the globe. Mr Chidambaram said only a few months ago that he saw the Sensex reaching 8,000 as a worry trigger . When what was a remote prospect started beginning to look like a possibility, he fortunately modified his position. And now, even at 10000, the market does not seem crazily out of line. But the truth is that this gravy train will run as long as FIIs continue pumping money into the market. On the strength of that, it seems certain that 2006 will end up as a milestone year for the Indian stock market....

Words: 361 - Pages: 2

Premium Essay

The Case of the Unidentified Industries-2006

...The Case of the Unidentified Industries-2006 1. Advertising Agency –E We believe the matching industry is Company E. As a service firm it does not contain inventory. It will also have zero inventory turnover. Through research we learned that the media purchase is made on behalf of the client which means that the accounts receivable and accounts payable would be roughly equal to one another. In addition, the receivable collection period (RCP) is greater than 30 days which is common in business to business firms. Also, the firm has a low debt to asset ratio and this is again because the advertising agency industry has no inventory. 2. Airline Industry-M We feel like industry M best suits this industry. Similar to the advertising industry the Airline industry the airline industry is also a service industry. Meaning the level of inventory is also zero. More importantly however, this industry’s main assets include fleets of airplanes and this will reflect a high plant and equipment percentage. The receivables collection period (days) for industry M is 12, because in this service industry the receivables collection period is short this. Also, most of the sales are processed quickly many in cash therefore their account receivables will also reflect a low number. For this reason we feel that letter M fits the description for the airline industry. 3. Bookstore Chain-B The matching industry is B.  Bookstore chains are part of the retail market and their......

Words: 1315 - Pages: 6

Free Essay

Ict Act-2006 Bangladesh

...INFORMATION AND COMMUNICATION TECNNOLOGY ACT, 2006 Prepared for Md. Ziaul Haque Senior Lecturer, Dept. Of Business Administration East West University Prepared by Bus-361 Sec: 6 Name | ID | 1. Md.Musrukh Ruhaim | 2010-2-10-091 | 2. MD. Tajul Islam | 2011-2-10-240 | 3. MD. Naiem Bhuiyan | 2011-2-10-110 | 4. Sunjida Haque | 2010-2-10-355 | 5. Md.Mahfuzur Rahman | 2011-1-10-049 | 6. MD. Mahmudul Hasan | 2011-1-13-060 | Date of Submission: December-03, 2014 Acknowledgement We are very pleased to accomplish the assign task given by our honorable course instructor Md. Ziaul Haque on the subject “Legal Environment of Business”. We are very much obliged to those persons who gave their valuable time in the organization overview part, opinion and advice to complete this report. At first, our profound gratification goes to, Md. Ziaul Haque the honorable course instructor of Business Communication for his supervision to complete the assignment successfully. By providing us the opportunity of preparing this assignment, he has made us able to relate the academic knowledge of Business law with practical scenario. Not only this, he has also contributed much in this term paper by giving us proper guideline. We are acknowledging to all of those web sites from which we have taken necessary helps. Our gratitude also goes to some senior students for their guidance in various stages of completing the term paper and......

Words: 12177 - Pages: 49

Premium Essay

Li & Fung 2006

...Li & Fung 2006 1. What are the major competitive advantages/disadvantages of Li & Fung in 2006? Supply chain management is the core business of ‘Li & Fung’. Trading, logistics and distribution are the three main special essentials of ‘Li & Fung’s business. Supply chain excellence has become a key driver of competitiveness in most industries globally. A supply chain encompasses all activities from obtaining raw materials through to the delivery of final goods or services to the end-consumer. These include material sourcing and handling, product design, production planning, order processing, inventory management, transportation, warehousing and customer service. It also includes the management of information flow that facilitates communication among all these functions. For a company to be competitive, its supply chain must be flexible, agile, cost-effective and responsive. Nowadays it is more common for companies to collaborate in a global context where each of them focuses on its core competency and outsource the rest. As a consequence their successes becomes increasingly dependent on how well they can orchestrate the different aspects and manage the external parties involved along the supply chain. Equally important are companies' abilities to satisfy their customers' needs, shorten production lead time and lower cost. ‘Li & Fung’ has evolved from a sourcing agent to a global supply chain manager by being an innovator in the development of supply......

Words: 1329 - Pages: 6

Premium Essay

The Case of the Unidentified Industries-2006 |

...The Case of the Unidentified Industries-2006 | | In this case, a summary sheet which contains 14 sets of financial data from 14 different industries is provided. The task is to match 14 different firms with 14 industries by distinguishing the differences (e.g. sources of financing, profitability, the inventory turnover and the accounts receivable collection period) in the financial structures. 1. Advertising agency: the matching industry is E. As a service firm, it does not contain inventory, so first of all, it can be narrowed down to E, G, M, and N. And generally B to B firms provide credit terms to their customers which result in receivables collection periods(RCP) is larger than 30 days, therefore it can be further narrow to E,G,N. Furthermore, based on the given hint, the media purchase is made on behalf of the client, which means the account receivable and account payable should be roughly equal, since the agency does not pay for the media services until their client pays. 2. Airline: the matching industry is M. Similar to Ad agency, it is a service firm, so its inventory is zero as well (G, M, N), and moreover, it is also a Business to Customer firm, its RCP is relative short(less than 30 days), so only M (RCP=12) is left which matches the description. 3. Bookstore chain: the matching industry is B. Retail firms like bookstore chain are likely to have shorter RCP (less than 30 days), which means only A, B, H, I, K and M match this description.......

Words: 344 - Pages: 2

Premium Essay

The Case of the Unidentified Industries—2006

...9-207-096 REV: APRIL 10, 2008 The Case of the Unidentified Industries—2006 Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F265469 If you were asked to visualize (in income statement and balance sheet form) the financial structure of a typical firm in one particular industry, do you think you could do it? How close to your “vision” do you think the “reality” would be? What if you were asked to do the same experiment covering 14 firms drawn from 14 different industries? How many of the 14 do you think you would get right? You may be surprised by how much you already know! Exhibit 1 presents the balance sheets (in percentage form) and other selected financial data for 14 firms drawn from 14 different industries. While there are clear differences in the financial structures of different firms within a single industry, the firms selected have figures that are broadly typical of those in their industry. Try to match the 14 firms operating in the 14 industries named below with the 14 sets of financial data presented in Exhibit 1. Use any approach you find helpful. Advertising agency (about half of total revenue derived from commissions that equal 15% of media purchases for clients) Airline Bookstore chain Commercial bank (fitted into the most nearly comparable balance sheet and ratio categories of the nonfinancial companies) Computer software developer Department store chain (with its “own brand”......

Words: 1282 - Pages: 6

Free Essay

2006 Table

...[Type text] Taper Protection Table 2006 Members Date of birth from 02.04.1962 02.05.1962 02.06.1962 02.07.1962 02.08.1962 02.09.1962 02.10.1962 02.11.1962 02.12.1962 02.01.1963 02.02.1963 Date of birth to 01.05.1962 01.06.1962 01.07.1962 01.08.1962 01.09.1962 01.10.1962 01.11.1962 01.12.1962 01.01.1963 01.02.1963 01.03.1963 Date of end of......

Words: 461 - Pages: 2

Premium Essay

An Inconvenient Truth (2006) – Review

...An Inconvenient Truth (2006) – Review “An Inconvenient Truth”, a 2006 documentary film directed by Davis Guggenheim, attempts to raise the alarming issue of climate crisis due to Global Warming and it foretells the dreadful consequences that the future generations on the Planet Earth are likely to experience. The film features a strong political figure, Al Gore (former Vice President of United States), to unleash the astonishing facts and predictions related to Global Warming, which is undoubtedly one of the biggest societal concerns today. The main purpose of the film is to educate the citizens of the world about the highly severe environmental challenge of global warming by separating the truth from the fiction and the actual connections from the misunderstandings, and to reenergize the environmental movement. It tries to convince people that it is their moral imperative to hear the environmental warnings that are scientifically sound. The film documents a revolutionary slide show by Al Gore that he estimates to have given at least 1000 times across different locations around the world. The documentary contains stark visuals of the recent natural calamities, possible future disasters and the mind-boggling graphs that force the audience to take a deep interest in the issue. It uses small animated clips to explain the phenomenon of global warming, highlight its probable impact on polar ice caps and foresee the likelihood of extinction of the living organisms there. The...

Words: 1527 - Pages: 7

Premium Essay

Case Study Apple 2006

...APPLE COMPUTER AND STEVE P. JOBS (2006): PIXAR ANIMATION AND WALT DISNEY COMPANY Prepared by: AYURO, Roselyn CULPA, Cielo Mae CANO, Russel Paul EDER, Greniel Ann PEREZ, Jessamae DATE: February 20, 2012 TO: Apple Computer and Steve P. Jobs (2006): Pixar Animation and Walt Disney Company FROM: Accounting Students Consulting Team, UMAK Chapter RE: Analysis of Apple Company’s future and its competitive advantage BRIEF SUMMARY:  This report aims to evaluate Apple Computer • past and present performance in order to most importantly stipulates the future position of this largely successful company. Being that the company’s objective centers on increasing profits, increasing market share, and maintaining brand image., this report tries to identify strategies that make their company more competitive. The analysis uses SWOT, IFAS, EFAS and other similar evaluative tools to reach an understandable and valid generalization. SITUATION DEFINITON: • CURRENT PERFORMANCE Today Apple’s operations are as diversified as they were never before. With its currently 13,599 employees worldwide it generated revenue of $63 million in the last quarter. It holds cash reserves of over %4.5 billion and has a ROIC of 3.05%. Apple’s operations are spread around the PC industry, computer peripherals and the software and service industry. In the overall PC industry Apple’s market share has diminished to a skinny 2.1%. Apple itself doesn’t look itself at the overall PC......

Words: 2430 - Pages: 10

Premium Essay

Bp’s 2006 Annual Review

...BP’s 2006 Annual Review The first of the four steps in BP’s corporate strategy was to focus on the safety of the people, safety of the environment and improve the safety in their process. The second step for BP’s corporate strategy was to reinforce the effectiveness of their operational performance and build on to their performance improvement and execution. The third step in BP’s corporate strategy was to invest in new projects or ventures strengthening their portfolio but at the same time trimming unneeded fat. The last and final step in their corporate strategy was to take advantage of the innovations from science and engineering to improve the relationship that energy has with the world. The BP board sees Safety as the most important issue requiring attention and this has been brought about mainly due to the lack of process safety surrounding the Texas City incident resulting in 27 deaths. Because of this incident it has effected BP’s reputation as a responsible operator and has given the consumer a perception of an incompetent energy supplier. BP has always presented itself as a ‘green’ company and it had even furthered its commitment in their corporate strategy by investing in environmental projects. For example, BP Alternative Energy is devoted to providing low-carbon power from solar, wind, as well as hydrogen and natural gas sources The strategy behind BP’s business of Exploration and Production is to capitalize on......

Words: 453 - Pages: 2

Premium Essay

Litzky, Eddleston & Kidder, 2006

...2006 Litzky, Eddleston and Kidder 91 The Good, the Bad, and the Misguided: How Managers Inadvertently Encourage Deviant Behaviors by Barrie E. Litzky, Kimberly A. Eddleston, and Deborah L. Kidder* Executive Overview Recent estimates of the costs associated with deviant behavior in the workplace are staggering. While part of the managerial function requires the establishment of rules and policies that promote good customer service and product consistency, managers who lead with a firm hand or place too much pressure on sales quotas, may be unknowingly contributing to their employees’ deviant behaviors. Managers must learn to identify the role that they play in triggering employee deviance. Once recognized, there is much that managers can do to ameliorate the triggers that encourage otherwise honest employees to engage in deviant behavior. M “I wouldn’t say what I did was unethical. Rather, it was more, say, questionable. But hey, my manager says, ‘The customer is always right.’ So basically, I was following her orders.” “Come on – everybody does it. It’s almost expected. I bet even my manager did it when he had my job.” “Considering how much money I bring into this place, I deserve it. They should be paying me more anyway.” anagers often face employees like these who try to justify their actions after being caught behaving inappropriately. Some managers may terminate these employees in an attempt to rid the organization of such unscrupulous......

Words: 8340 - Pages: 34