Couldn't agree more. At least about the result.
Lloyd Rucker committed widespread fraud, went to prison, and tried to avoid paying a multimillion civil judgment against him by making massive contributions to 401(k) plans well in excess of IRS limits (and then lying to everyone, including the IRS, about them). The bankruptcy court said: No way. We can grab these. But the district court reversed, saying that these funds were indeed exempt.
The Ninth Circuit in turn reverses the district court. Holding that the bankruptcy court's decision was not clear error.
I'd have gone even further. It's crystal clear that the principal purpose of putting these funds into the 401(k) was to defraud creditors rather than for legitimate retirement reasons. Indeed, had the bankruptcy court held otherwise, I'd have held that to be plain error. And am quite frankly stunned that the district court -- Judge Morrow, who's ordinarily a bright and reasonable jurist -- reversed the bankruptcy court.
No way this was a legitimate retirement scheme. To Judge Gould, this case is all about standard of review, and a reversal is required because the bankruptcy court's decision was not clearly erroneous. Which is true. But to me the case is even more about the facts. And I'd have reversed regardless of the standard of review.
