Sure, let's talk about "fraudulent conveyance."

Since the topic has come up a couple of times, and I've been asked about it privately, we're going to do a short (HA HA!!) post on the topic of something called "fraudulent conveyance", specifically in the context of my defamation judgment against Lloydminster's Lord Baron Twatrick von ("Patrick Ross") Loadenhosen, and what appears to be a pathetic attempt by both he and his immediate family members to conceal Patrick's assets from the impending collection proceedings (which, barring a doomed appeal by the Twatster, are scheduled to begin in six days). I'll be stealing bits and pieces from this article, so let's get to work.

Let's start with the basic definition:

Quite simply, a fraudulent conveyance ("FC") is an attempt to stiff your creditors by, in some way, assigning or transferring your ownership of an asset to someone else, then claiming it's not yours anymore. As an example, if you know you're about to be sued or perhaps about to declare personal bankruptcy, you might want to protect that $2M Bugatti Veyron 16.4 of yours by, under the table, signing it over to your nephew, then subsequently claiming, "Bugatti? What Bugatti?" (We'll be coming back to this example a couple of times.)

In the context of this spat with Patrick, the possibility of an FC arises with respect to two rumours I have been hearing:

1. Patrick, along with his siblings, inherited sizable chunks of valuable farmland in the vicinity of Marshall, SK from their grandfather, which I have been told Patrick has quietly signed over to a close relative to hide it from me, and
2. Patrick's father has re-written his will, specifically removing Patrick from it and instead passing on what he would have received to one of Patrick's sisters, again with the intent of hiding said assets from me (which one assumes is primarily represented by the current family home in Lloydminster where Patrick resides at the moment).

Let us deal with the farmland issue first.

The case of coming into an inheritance is actually fairly common in bankruptcy proceedings; if you are an undischarged bankrupt currently paying off a Conditional Discharge Order (CDO), and you get a sudden windfall like an inheritance or winning the lottery, the rules are clear -- such windfalls are called "after-acquired assets" (AAA) and you are legally required to turn them over to your trustee for disbursement among your creditors. Importantly, that disbursement is not limited to the amount of your CDO; oh, no ... if you're suddenly in the money, then your creditors are entitled to the full amount you owe them (in my case, around $115K), which is why some bankrupts go to great lengths to keep such windfalls quiet and hope no one finds out. But those sorts of tricks rarely work, and here's why.

The first trick bankrupts might try is to refuse to accept the inheritance -- their attitude might be, "What if I just refuse to take it right now, and just wait for my bankruptcy to end?" Um, no, that's not how it works. The law is crystal clear on this -- an inheritance devolves to the recipient immediately at time of death; that is, you have no right to refuse to accept it.

In addition, following close on the heels of the above is that, the instant the asset devolves to the bankrupt, it becomes an AAA and thus becomes the property of the trustee. In short, if you're still an undischarged bankrupt and win $10 million in Lotto 649, your creditors are about to get paid off in full. This is not debatable, it's black-and-white bankruptcy law. Oh, and the idea of frantically signing over the asset to, say, a close relative? Doesn't work since, as you can see above, it was never your asset to begin with -- it went directly from the benefactor to you to your trustee. At no time was it ever in your possession long enough for you to play games. In short, if during his bankruptcy (or for at least two years prior to his filing back in December of 2012) Patrick was left that speculative farmland in a will, it's not his, it belongs to bankruptcy court and, in short order, it will be mine. So much for the farmland ... now let's talk about the second issue -- the will and the house -- because this issue is way more interesting.

It's common knowledge that Patrick is currently living at home in Lloydminster in the family home with his remaining parent -- his father -- and it would have been only natural that, since all of Patrick's siblings seem to have done all right for themselves and are not depressing failures as is Patrick, the family home would have been left to Patrick to keep him from living in a cardboard box under the same bridge as Sheila Gunn Reid. However, in order to protect that asset from me, the rumour is that Patrick was removed entirely from the will and what would have gone to him was instead left to one of his sisters. A clever dodge, but here's why that strategem is pretty much doomed to failure.

It's reasonable to assume that the family can argue that Patrick was removed from the will because his father was so devastatingly disgusted with what sort of crushing failure Patrick had turned into that he finally gave him the boot from the will and, interestingly, one could make that argument; that is, the family Ross could claim that ditching Patrick from any parent-based inheritance was not a fraudulent conveyance, but represented nothing more than his father just giving up on Patrick as a dismal loser after all these years. It would be an interesting ploy ... except it has one really, really, really major flaw.

Even if Patrick did not officially inherit the family home, it would be reasonable to assume that the rest of the family would simply allow him to continue living there; that is, sure, the home might be in someone else's name, but there would be a tacit agreement among family members to treat it as if Patrick owned it, so he would still have a place to live.

Nope, that won't work:

What the highlighted portion above means is that one of the dead giveaways of a fraudulent conveyance is that you "officially" signed over a valuable asset to someone else to protect it from creditors, but you continue to use that asset and treat it as if it still belonged to you. From our earlier example with your Bugatti, sure, you might sign it over to your nephew, but if it comes to light that that nephew just lets you store it in your garage and continue driving it as before, well, no, that won't fly. In a more general sense, if you claim that you have no ownership or financial interest in a particular asset, then you are most emphatically not entitled to continue taking advantage of it. And how does that apply here? I'm glad you asked.

If the family Ross' position is that Patrick is inheriting nothing (particularly, not inheriting the house), then he cannot continue to live there for cheap or free upon the demise of his remaining parent. Read the above highlighted bits again -- you cannot claim to have divested yourself of an asset, while continuing to treat that asset as if it was still in your possession. It doesn't matter if the rest of the family all agrees to this; it would not be allowed.

There is, however, one obvious way Patrick could continue to reside in the family home, and that is if he simply paid rent, but it would have be as if he was just another renter, and it would have to represent a fair market value for the property -- no sweetheart "family discount" deals -- and given that I will soon be garnishing all of Patrick's salary, it's not clear how he could afford it. In any event, as you can see, the laws regarding fraudulent conveyance preclude Patrick from refusing any inheritance related to the family home, but insisting on continuing to live there for free. And if you think this is already problematic for Patrick, it gets way worse.

If you think about it, this principle also applies to the alleged farmland; that is, if the family Ross takes the position that Patrick has no stake in the reported farmland, then he is not entitled to any profits from the yearly harvest. It has been reported to me that since the siblings all own a portion of said farmland, then each of them gets a share of the proceeds from the annual(?) harvest. That's all perfectly reasonable, except if the claim is that Patrick is not (no longer?) one of the owners, then it would be wildly inappropriate for him to be getting any sort of annual dividend based on what the farm produces. See how that works?

Is there any way around this? Well, I suppose the rest of the family could just withhold Patrick's share of the profits until this all blows over and he is out of bankruptcy, but given Patrick's indebtedness to me, we're talking many years and, if in that time, such surreptitious withholding came to light, there would be massive hell to pay, and charges. But there's one more point a friend suggested to me that would make it unnecessary to even try to establish such withholding.

Since I will be filing to get several years worth of Patrick's financial records, it would be sufficient to identify a sizable annual deposit to Patrick's bank account and ask, "Where did that come from?", and if it can be established that it is his annual dividend from the farm profits, then it's over. And the advantage to that approach is that one does not need to worry about Patrick's family trying to conceal payments from now on, as those previous payments would already be part of the financial record and there is nothing anyone can do about hiding any of that.

I apologize for rambling on this long, but since people were asking, I figured I might as well just blather on about it for a bit. In any event, it would seem that things are coming to a head in about six days. I'll keep you posted.

NOW I'M JUST BEING CRUEL. Imagine what sort of unmitigated disaster your life has become when your most brag-worthy accomplishment for the week is that the police have not yet shown up at your door.

ONE MORE THOUGHT: It's worth mentioning that if (and I stress, if) there is some sort of effort to hide Patrick's assets from me, he can't possibly be doing all that on his own -- it would clearly require co-operation from members of his immediate family who are assisting Patrick in assigning away his assets. And while they might think this is all very clever, one wonders if they have any idea what they've signed on for.

As I have already explained, I will be requiring Patrick to turn over many years worth of his financial records, dating all the way back to his initial filing for bankruptcy in December of 2012 (and, as I read it, possibly even earlier). And at the first whiff of impropriety involving any of Patrick's family, I will file to force them to turn over their financial records.

It's worth noting that, over the years, I've made several attempts to settle this matter amicably, and all of my efforts were mocked and rejected, so here we are -- on the eve of collection proceedings whereupon I am going to tear apart Patrick's life financially and, if the trail of bread crumbs supports it, the financial lives of his enabling family members.

This has been going on for well over a decade now, and if Patrick's family thinks this is going away any time soon while helping Patrick hide his personal assets, well, I am more than prepared for this to take another decade, during which they run the risk of having to hand over possibly a house or some valuable farmland, while spending the next several years wondering when the process server is going to show up at their door.

If they're willing to play this game with me, I can assure them I'm up for it.

Bring it.

ONE MORE THING ... If Patrick tries to plead penury, he is going to have to explain this tweet from back in 2019, crowing about "vastly improved finances":

I'm sure there's a perfectly reasonable explanation.