Discussion

From the scenarios below and explain the best solution. Include comments related to any ethical issues that arise. To support your answer, you should try to locate at least one case that has been decided on the issue or one that is currently pending.

Scenario I—Bankruptcy

Rusty Weaver, a project manager for the Tipton Machinery, filed a petition in bankruptcy under Chapter 7, seeking to discharge $75,000 in credit-card debts and $45,000 in student loans. Weaver’s wife died and left him with two children, Paul, who attended college, and Diana, who was thirteen years old. According to Weaver, Diana was an “elite” swimmer who practiced ten to fifteen hours a week and placed between first and third at more than thirty competitive events. Diana was homeschooled with academic achievements that were average for her grade level. His petition showed monthly income of $5,325 and expenses of $5,200. The expenses included annual homeschool costs of $8,200 and annual swimming expenses of $5,000. The expenses did not include college costs for Paul, or airfare for his upcoming summer trip to Europe, and other items. The trustee allowed monthly expenses of $4,227, with nothing for swimming, and asked the court to dismiss the petition.

  • If Weaver qualified for Chapter 7, which debts would be discharged? Which debts would not be discharged? Why?
  • Using the median income from your state, does Weaver qualify for Chapter 7?
  • Should the court grant the trustee’s request? Does Weaver have other options if the Chapter 7 petition is dismissed?

Explain your answers and support them with relevant scholarly sources.

Scenario II—LLC Liability

Plaintiffs Karl and Ginny Drake were injured by lead paint while living in a house owned by Riverwood Homes, LLC. The plaintiffs sued Bill Ding, a member of the LLC at the time it owned the property, alleging that he was liable for their injuries. Ding had limited involvement with the property. He has never visited the property, and neither he nor the LLC was aware that the plaintiffs were occupying the property until after the LLC acquired it. Once they realized this fact, they took legal action to have the plaintiffs removed. The applicable housing code imposes liability on any individual who “owns, holds, or controls” the title to the property.

  • Is Ding liable for the plaintiffs’ injuries?
  • What are the policy arguments in favor of both parties?
 
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