Opinion
No. 78 B 109
February 22, 1979
Involuntary Bankrupts — Petition — Default Judgment — Post-Judgment Attack
Mere conclusory statements to the effect that there is a valid defense to the charges of fraudulent transfers, are not enough to open a default adjudication in bankruptcy. The original involuntary petition was filed on January 20, 1978. Service upon the bankrupt was effectuated in person and by mail. Upon the failure to respond to the petition within the time fixed pursuant to Bankruptcy Rule 112, the bankrupt was adjudicated on February 28, 1979. The bankrupt failed to attend the first creditors meeting, at which time a trustee was appointed. He did appear, however, at another meeting held later. The bankrupt's consultation with present counsel occured after the trustee undertook to marshal, as assets of the estate, certain New Jersey residential real property alleged by the trustee to be owner of record and/or beneficially owned by the bankrupt.
The request to dismiss the bankruptcy petition in total is based upon the assertion that it fails to state a cause of action upon which relief can be granted. In the instant case, however, the petition is not defective. While perhaps not perfect in a form book sense, it does allege that preferential transfers were made to a bank in partial satisfaction of a loan and to New York Telephone Company in payment for past services. This sufficiently apprised the bankrupt of the charges against him.
A bankrupt seeking to vacate his default adjudication in bankruptcy must demonstrate a meritorious defense to the petition. This defense must be alleged by more than a mere conclusory statement that it exists. Predicated on the foregoing, the bankrupt's motion to dismiss the petition and to vacate the adjudication is denied in all respects. See Bankruptcy Rule 924 at ¶ 20,354.