Assuming you are the debtor’s lawyer in the bankruptcy of Jerry Mayers who teaches antitrust law and copyright at the University of the Southern States
Law School in Biloxi, Mississippi.
Six months before filing his bankruptcy case, Mayers incurred several
debts which led to the following claims in his bankruptcy case.
First, Local Bank filed an unsecured claim for $950. Six months before his
bankruptcy filing, Mayers had applied for a loan for $1,000 to pay for his various
bad habits. Local Bank had him fill out a financial statement in connection with
the loan. He had nine debts totaling $12,000. He asked the loan officer what to
do, and the bank official told him to “just do your best.” Mayers listed the four
highest debts totaling $8,000, but omitted the other eight. Mayers signed the
financial statement and gave it to the bank official, who promptly put it in the filing
cabinet. The bank officer then immediately gave Mayers the $1,000 in $50 dollar
bills. Second, a claim for $7,555 by American Express for charges on Mayers’s
American Express Charge Card. Mayers tells you that for the two years before
bankruptcy, he let his sister use the card because she was starting a business
and needed the credit. Further discussions reveal that Mayers’s sister has been
receiving government assistance for five years, and that her business is already
in financial difficulty because she cannot pay its bills. Mayers says he shouldn’t
be responsible for this bill, but you determine that his sister is not an authorized
card holder under Mayers’s account agreement with AMEX.
Finally, Mayers’s brother loaned him $2,000 a month before his bankruptcy
filing with “no questions asked.” Apparently Mayers had done the same for his
brother awhile back, and his brother wished to reciprocate. Mayers promptly
went to a local casino and blew all of the money. While losing at blackjack (he
plays based upon “his gut, not his brain”), Mayers told the dealer that his brother
and his whole family “could go to Hades for all I care – they’ve taken from me all
my life, now I’m going to get them.”

Required:
Anticipate any arguments that the foregoing creditors might make in
seeking to maximize their recovery in Mayers’s bankruptcy case, and evaluate
what the result will be. Please state any additional facts that might be relevant to
a final determination in each case.