John Franklin Foust - Page 6

                                        - 6 -                                         

          commingled the funds and assets of Foust Bros. Farms with their             
          personal funds and those of other corporations as to cause the              
          bankruptcy court to pierce the corporate veil and hold (see                 
          below) Foust Bros. Farms and the other corporations used by                 
          petitioner and James to carry on their farming and farm-related             
          activities to be their alter egos and ineffective for the purpose           
          of providing corporate limited liability.                                   
          Petitioner’s Bankruptcy Proceedings                                         
               On July 22, 1988, petitioner filed a chapter 12 petition in            
          bankruptcy with the U.S. Bankruptcy Court for the Southern                  
          District of Iowa.4  On August 10, 1988, petitioner filed a                  
          Statement of Financial Affairs and related bankruptcy schedules             
          in the bankruptcy proceeding.  On the Statement of Financial                
          Affairs, a sworn statement, submitted under penalty of perjury,             
          petitioner purported to list all his assets and liabilities.  The           
          Statement of Financial Affairs did not contain any reference to             
          unpaid rent owed by petitioner to Mesa or Teton.                            
               On December 29, 1988, the chapter 12 bankruptcy proceeding             
          was converted to a chapter 7 proceeding.  On January 23, 1989,              
          petitioner filed a new sworn Statement of Financial Affairs,                
          which made no mention of unpaid rent owed to Mesa and Teton.                

               4 On Apr. 13, 1988, James had filed a personal chapter 7               
          petition in bankruptcy.                                                     

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  Next

Last modified: May 25, 2011