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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.
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