MEMORANDUM AND ORDER
This is an appeal from an order of the bankruptcy court(Rosenthal, J.) entering judgment after trial and three remandsin an adversary proceeding. The bankruptcy court deniedDebtor-Appellant Aaron Watman's discharge of indebtedness becauseit found that Watman transferred property of an insider with anintent to defraud pursuant to 11 U.S.C. § 727(a)(7) (2000),incorporating § 727(a)(2)(A). Watman asserts that the bankruptcycourt erred in both its factual findings and its manner of inquiry on remand.
After a hearing and review of the record, the Court AFFIRMSthe order of the bankruptcy court.
The Court of Appeals for the First Circuit summarized thebackground facts of this case in In re Watman, 301 F.3d 3, 5-7(1st Cir. 2002). That factual summary is incorporated here; theprocedural history follows.
On March 22, 1999, Watman filed for bankruptcy protection underChapter 7 of the Bankruptcy Code. Id. at 6. On August 27, 1999,Groman commenced this adversary action in bankruptcy court todeny Watman a Chapter 7 discharge: alleging, inter alia, that Watman's actions warranted a denial of his discharge pursuant to 11 U.S.C. §§ 727(a)(2) and (a)(7). Watman subsequently moved to dismiss Groman's complaint for failure to state a claim under Rule 7012 of the Federal Rules of Bankruptcy Procedure and Rule 12(b)(6) of the Federal Rules of Civil Procedure. That motion was granted by the bankruptcy court. On appeal, the BAP reversed the bankruptcy court's dismissal of the § 727 objections to discharge and remanded for a trial on the merits. After trial, the bankruptcy court entered judgment in favor of Watman. On appeal, the BAP affirmed the judgment of the bankruptcy court.Id. at 6-7.
On appeal, the First Circuit determined that the bankruptcycourt's factual findings were too indistinct and vacated thejudgment, remanding the "case to the bankruptcy court foradequate findings on [several] issues." The First Circuit left the bankruptcy court "free to take more evidence if deemednecessary to carry out this mandate." Id. at 13.
On remand, the parties agreed that no further evidence wasnecessary, and the bankruptcy court invited the parties to submitadditional memoranda to supplement the findings. (R. at 497-500.)Subsequently, the bankruptcy court entered judgment in favor ofGroman on Count II pursuant to § 727(a)(7), incorporating §727(a)(2), but in favor of Watman on Count I pursuant to §727(a)(2). (See R. at 14, 505.)
On appeal, the BAP found that the bankruptcy court had"addressed some, but not all of the points mentioned by the Courtof Appeals" and remanded for "more explicit findings in order tofulfill both the words and spirit of the mandate." (R. at 516,519-20.)
On remand, both parties submitted additional memoranda. Thebankruptcy court supplemented its previous findings andconclusions and again entered judgment in favor of Groman onCount II but in favor of Watman on Count I. (R. at 561-63.)
Watman filed a timely appeal, and Groman elected to have theappeal heard by this Court pursuant to 11 U.S.C. § 158(c) (2000).(See R. at 561, 574-75; Appellant Br. at 1.)
III. STANDARD OF REVIEW
A "district court reviews a bankruptcy court's judgment in thesame manner in which [a Court of Appeals] review[s] lower court proceedings." In re DN Associates, 3 F.3d 512, 515 (1stCir. 1993). Questions of law are reviewed de novo. In reWinthrop Old Farm Nurseries, Inc., 50 F.3d 72, 73 (1st Cir.1995). "`Findings of fact . . . shall not be set aside unlessclearly erroneous. . . .' Applications of law are reviewed denovo and are set aside only when they are made in error orconstitute an `abuse of discretion.'" In re DN Associates,3 F.3d at 515 (citations omitted). A finding of fact is clearlyerroneous when, after reviewing the evidence, the court "`is leftwith the definite and firm conviction that a mistake has beencommitted.'" In re G.S.F. Corp., 938 F.2d 1467, 1474 (1st Cir.1991) (quoting Anderson v. City of Bessemer City, N.C.,470 U.S. 564, 573 (1985)). In reviewing a bankruptcy court's findingsof fact, "due regard shall be given to the opportunity of thebankruptcy court to judge the credibility of the witnesses."See Fed.R.Bankr.P. 8103; In re G.S.F. Corp.,938 F.2d 1467, 1474 (1st Cir. 1991). "Of course, if a reviewing courtdetermines that a bankruptcy court's findings are too indistinct,it may decline to proceed further and remand for more explicitfindings." In re Healthco Int'l, Inc., 132 F.3d 104, 108 n. 5(1st Cir. 1997).
11 U.S.C. § 727(a) (2000) provides that a bankruptcy court"shall grant the debtor a discharge, unless" an enumerated exception is met. In this case, the bankruptcy court deniedWatman's discharge in bankruptcy based on a finding that Watman's"actions fall within the exceptions to discharge set forth inSection 727(a)(7), incorporating section 727(a)(2)(A)." (R. at572.)
To succeed on a claim for the denial of discharge under §727(a)(2)(A),1 the party requesting the denial must
show by a preponderance of the evidence that (1) the debtor transferred, removed, destroyed, mutilated, or concealed (2) his or her property (or the property of the estate if the transfer occurs post-petition) (3) within one year of the petition filing date (for prepetition transfers) (4) with intent to hinder, delay or defraud a creditor.In re Watman, 301 F.3d at 7 (1st Cir. 2002) (citing In reHayes, 229 B.R. 253, 259 (B.A.P. 1st Cir. 1999)) (emphasisadded). Because of the seriousness of a denial of discharge, thereasons for denying a discharge "must be real and substantial,not merely technical and conjectural." In re Tully,818 F.2d 106, 110 (1st Cir. 1987) (citation omitted). As such, "[g]roundsfor discharge are construed liberally in favor of the debtor."In re Watman, 301 F.3d at 7 (citing In re Burgess,955 F.2d 134, 137 (1st Cir. 1992)). However, the "fresh start" objectiveof the Bankruptcy Code must be balanced with the purpose of certain sections of thelaw such as § 727(a), which
make certain that those who seek the shelter of the bankruptcy code do not play fast and loose with their assets or with the reality of their affairs. The statutes are designed to insure that complete, truthful, and reliable information is put forward at the outset of the proceedings, so that decisions can be made by the parties in interest based on fact rather than fiction.In re Tully, 818 F.2d at 110.
By incorporating § 727(a)(2)(A), § 727(a)(7) enables the partyrequesting the denial of discharge to prevail based on the actsof the debtor regarding the property of not only the debtor butalso the debtor's "insiders."2 Where the debtor is anindividual, as Watman is here, the term "insider" is defined toinclude a "corporation of which the debtor is a director,officer, or person in control." 11 U.S.C. § 101(31)(A)(iv)(2000).
Groman, as the party requesting the denial of discharge, bearsthe burden of proving his § 727 objection. Fed.R.Bankr.P.4005. Watman claims that the bankruptcy court erred in itsfindings of fact and erred at law. A. Claimed Errors in Findings of Fact
At issue in this appeal is whether the actions of Watman'sinsider allow the bankruptcy court to deny Watman a dischargeunder § 727(a)(7), incorporating § 727(a)(2)(A). "Under thistheory, Groman alleges that Childrens Dental is an insider ofWatman. . . . In light of Watman's status as sole officer,shareholder, and director of Childrens Dental, Childrens Dentalclearly qualifies as an `insider' of Watman for purposes of §727(a)(7), and Watman does not argue otherwise." In re Watman,301 F.3d at 7.
Watman does argue, however, that the bankruptcy court'sfindings of fact regarding Childrens Dental's property, Watman'sintent, and harm to Groman were "clearly erroneous."
1. Property of Childrens Dental
The second element of § 727(a)(7), incorporating §727(a)(2)(A), requires that the bankruptcy court determinewhether Childrens Dental's assets were "properly consideredproperty of Childrens Dental such that they would have beenincluded in the estate for the benefit of creditors." See Inre Watman, 301 F.3d at 7, 11-12. This property analysis isessential to determine "exactly what property was transferred"from Childrens Dental by Watman. See id. at 10. Here, thebankruptcy court began by providing the correct definition of"transfer" in its analysis. (Compare R. at 501-02 with R. at 444-45.) Next, based on this definition, the bankruptcy courtidentified what property "was and was not transferred betweenChildrens Dental and Lowell Dentistry," Watman's new corporation.In re Watman, 301 F.3d at 11. Judge Rosenthal found that Watmantransferred Childrens Dental's "space, patient records,employees, and good will" and "also used Childrens Dental's fundsto prepay expenses that he knew he or a new corporation wouldincur." (R. at 502, 565.) The only property not transferred and"remaining in Children's Dental's estate for liquidation by itsChapter 7 Trustee consisted of accounts receivable, an obsoletecomputer that Lowell Dentistry originally used then stopped usingat some point, furnishings, decorations, and a box of dentalsupplies of unknown value." (Id. at 569-570.) As such, thebankruptcy court did not fail, as alleged by Watman, "todetermine if certain assets of Childrens Dental constitutedproperty of the Childrens Dental estate." (Appellant Br. at 12.)
Watman argues that these findings are deficient for tworeasons. First, he contends that the bankruptcy court "failed toissue findings as to the value of each specific asset." (Id.)This argument, however, finds no support in the law. Neither §727 nor the First Circuit's remand requires that the bankruptcycourt perform such calculations. See § 727; In re Watman,301 F.3d at 3. Indeed, several bankruptcy courts have stated theopposite: "once a transfer by the debtor is established as fraudulent under § 727(a)(2)(A), it is not necessary to establishthe value of the transfer." In re Rothrock, 96 B.R. 666, 676(Bankr. N.D. Tex. 1989) (emphasis added); In re Riddle,8 B.R. 797, 799 (Bankr. S.D. Fla. 1980); In re Locke, 50 B.R. 443, 452(Bankr. E.D. Ark. 1985) (citing In re Riddle, 8 B.R. at 799).The Bankruptcy Act requires only that assets constitute "anythingof value — anything which has debt paying or debt securing power"to be considered "property." See In re Watman, 301 F.3d at 11n. 8 (quoting Robinson v. Watts Detective Agency, Inc.,685 F.2d 729, 734 (1st Cir. 1982)) (emphasis added).
Here, the bankruptcy court found that the property transferredfrom Childrens Dental had "value." Generally, "ChildrensDentistry's space, patient records, employees, and good will"constituted "all of the value of Childrens Dentistry." (R. at502.) Specifically, Groman proffered "evidence of the value oftransferred funds," and the bankruptcy court found that "[t]heremust be some value" in the good will of Childrens Dentalindependent of Watman "given that Watman was not the only dentistemployed by or affiliated with Childrens Dental." (R. at 503.)Because nothing requires the bankruptcy court to perform exactvaluations, the bankruptcy court's findings that such assetsconstituted "property" of Childrens Dental were not clearlyerroneous.
In addition, Watman should be mindful that his actions, transferring property from Childrens Dental, made calculatingexact values more difficult by depriving the trustee of "theopportunity to conduct a sale of Children's Dental as a goingconcern." (R. at 10.) The First Circuit has found such conduct toprevent defendants from demanding exact valuations in the damagescontext: "[A] defendant whose wrongful conduct has rendereddifficult the ascertainment of the precise damages suffered bythe plaintiff, is not entitled to complain that they cannot bemeasured with the same exactness and precision as would otherwisebe possible." Allens Mfg. Co., Inc. v. NAPCO, Inc., 3 F.3d 502,505 (1st Cir. 1993).
Second, Watman argues that the bankruptcy court's finding thatChildrens Dental had any going concern or good will valueindependent of Watman was clearly erroneous. (See Appellant Br.at 14.) As a threshold matter, state law defines "good will" and"going concern value" in bankruptcy determinations. SeeBarnhill v. Johnson, 503 U.S. 393, 398 (1992) ("In the absenceof any controlling federal law, `property' and `interests inproperty' are creatures of state law."). Massachusetts lawdefines these two distinct but related concepts as follows: Good will is "all that goes with a business in excess of its mere capital and physical labor, such as reputation for promptness, fidelity, integrity, politeness, business sagacity and commercial skill in the conduct of its affairs, solicitude for the welfare of customers and other intangible elements which contribute to successful commercial adventure." Martin v. Jablonski, 253 Mass. 451, 149 N.E. 156, 159 (Mass. 1925). Where "the resources of an ongoing enterprise are used in conjunction with each other they may well have a collective value, as so used, in excess of the sum of the values of the individual resources taken separately." Glosband, 21 B.R. at 975. That collective value is referred to as "going concern value." Id.In re Watman, 301 F.3d at 11 n. 9. Regarding good will,Massachusetts law also recognizes that in the context ofprofessional partnerships, including those of dentists, "theexistence and value of good will upon dissolution of apartnership is a question of fact" and that "`[i]n the absence ofan agreement to the contrary the good will of a partnership is anasset of the firm, and a partner appropriating it to his own usemust account for its value.'" Stefanski v. Gonnella,15 Mass. App. Ct. 500, 502, 446 N.E.2d 734, 736 (Mass.App. Ct. 1983).Based on these principles, Massachusetts courts have "rejectedcases which held that there is no value to the good will of aprofessional partnership . . . even though upon dissolution thepartners could compete with one another." Id.
Watman cites In re Cooley, 87 B.R. 432, 443 (Bankr. S.D. Tex.1988), to support his argument that Childrens Dental has noindependent good will or going concern value. (Appellant Br. at13.) In Cooley, however, the Bankruptcy Court of the SouthernDistrict of Texas acknowledged that "personal good will can beand is generally distinguishable from business good will." Id.at 442. Cooley thus rested not on a point of law but rather, on its particular facts: The debtor, Dr. Denton A. Cooley, is without dispute one of the most famous heart surgeons in the world. His reputation in the medical field is unsurpassed nationally and internationally. . . . Dr. Cooley is indisputably a "rainmaker" in his profession. It is his reputation and his personal referral network on a local, national, and international level among cardiologists and other physicians which cultivates a continuous patient pool. . . . In sum, Dr. Cooley's contributions towards the earnings generated by his medical practice in 1987 far outweighed the collective contributions of the five associate surgeons.Id. at 434-35. By contrast, in this case, Childrens Dentalexisted before Watman joined the practice. (R. at 563.) Watman,both as a solo practitioner and as part of Lowell Dentistry,decided to operate at the same location, use the same furniture,equipment and supplies, employ the same employees (including anorthodontist and another dentist), retain the same patientrecords, and service the same patients as Childrens Dental. (R.at 566.) Before Watman filed for bankruptcy, he was willing tomake monthly payments for these combined Childrens Dental assets.(See R. at 563.) Under these circumstances, it was not clearlyerroneous for the bankruptcy court to find that there was somegood will and going concern value in Childrens Dental independentof Watman. (R. at 503, 569.)
In addition, the bankruptcy court found that the noncompetitionagreement between Watman and Childrens Dental indicated that"Children's Dental had value to be protected." (R. at 569.)Watman discounts this argument by citing In re Ward, 194 B.R. 703 (Bankr. D. Mass. 1996) for the propositionthat the effect of Watman's bankruptcy petition "was to cause thenoncompetition agreement to be rejected and to reduce the claimof Childrens Dental to a simple unsecured monetary claim."(Appellant Br. at 16.) The law regarding noncompetitionagreements, however, is in "disarray," and whether suchagreements are dischargeable claims in bankruptcy may depend onthe specific language of the agreement. See In re GroundRound, Inc., 326 B.R. 23, 30 (Bankr. D. Mass. 2005); SirSpeedy, Inc. v. Morse, 256 B.R. 657, 658 (D. Mass. 2000).
Regardless, this Court need not decide this dischargeabilityissue for two reasons. First, the circumstances other than thenoncompetition agreement, discussed above, are sufficient tojustify the bankruptcy court's finding that Childrens Dental hadvalue independent of Watman. Second, Watman's argument regardingdischargeability is inapposite. The relevant debate is whetherthe existence of the noncompetition agreement supported aninference of good will of the business apart from the personalgood will of Dr. Watman. Here, the noncompetition agreement wasin effect at the time of the transfer. While a noncompetitionagreement, without more, may not be enough to infer independentgood will or going concern value, it lends additional support tosuch an inference when other circumstances, such as thosediscussed above in this case, are present. Cf. Matrix Group Ltd., Inc. v. Rawlings Sporting Goods Co., Inc., 378 F.3d 29,34-35 (1st Cir. 2004) (finding such an inference too speculativeto support the irreparable injury required for a preliminaryinjunction when based on a noncompetition agreement alone).
Therefore, based on the bankruptcy court's findings, this Courtaffirms the bankruptcy court regarding Childrens Dental'sproperty.
2. Intent to Hinder, Delay, or Defraud
To deny Watman a discharge under § 727(a)(7) via §727(a)(2)(A), the bankruptcy court must also find that Watmanacted with an intent "to hinder, delay, or defraud his creditors(including Groman) from collecting on their debts." In reWatman, 301 F.3d at 8. To establish intent, the party seekingthe denial of discharge must prove actual, as opposed toconstructive, intent to defraud. Id. (citation omitted). "Giventhe practical difficulty of mounting direct evidence of thedebtor's intent, few cases turn on such proof," and courtsinstead, may infer actual intent from the facts and circumstancessurrounding the transfer. Id.; In re Varrasso, 37 F.3d 760,764 (1st Cir. 1994) (stating that "circumstantial evidence may besufficiently potent to establish fraudulent intent beyond hope ofcontradiction"); see also In re Sterman, 244 B.R. 499, 504(D. Mass. 1999).
Looking to the circumstances surrounding the transfer, courts have identified several objective indicia that, taken together, strongly indicate fraudulent intent. Those indicia include: (1) insider relationships between the parties; (2) the retention of possession, benefit or use of the property in question; (3) the lack or inadequacy of consideration for the transfer; (4) the financial condition of the party sought to be charged both before and after the transaction at issue; (5) the existence or cumulative effect of the pattern or series of transactions or course of conduct after the incurring of debt, onset of financial difficulties, or pendency or threat of suits by creditors; (6) the general chronology of the events and transactions under inquiry; and (7) an attempt by debtor to keep the transfer a secret.In re Watman, 301 F.3d at 8 (citations omitted). Other factors"include . . . a purported transfer of all or substantially allof the debtor's property; [and] the instrument affecting thetransfer suspiciously stating that it is in fact bona fide." Inre Lang, 246 B.R. 463, 469 n. 9 (Bankr. D. Mass. 2000)(citations omitted), aff'd, 256 B.R. 539 (B.A.P. 1st Cir.2000). As a finding of fact evaluated under the "clearlyerroneous" standard on appeal, reviewing courts "typically deferto the bankruptcy court's conclusions" when "the intent issue[turns] on the credibility and demeanor of the debtor." See Inre Watman, 301 F.3d at 8 (citations omitted).
As direct evidence of an absence of intent, Watman assertedthat the purpose of Lowell Dentistry was to preserve the value ofChildrens Dental and offered the testimony of Childrens Dental'scounsel. (See R. at 567.) Since Lowell Dentistry "took overChildren's Dental's practice" leaving "no practice . . . forChildren's Dental to operate" and "there was no writing evidencing any agreement between the two corporations, each ofwhich was controlled by Watman," the bankruptcy court found thetestimony "not credible." (See id. at 567-68, 571.) Thisfinding is not clearly erroneous.
As such, the bankruptcy court turned to circumstantial evidenceof intent and found that all but one of the "objective indicia"pointed to Watman's "intent to hinder, delay, or defraud" Groman.(R. at 571-73.) Judge Rosenthal detailed his findings regardingeach factor as follows: (1) Insider relationships between the parties. (See id. at 563, 566, 572.) (2) Retention of possession, benefit or use of the property in question. (See id. at 570-71.) (3) Lack or inadequacy of consideration for the transfer. (See id. at 504-05, 567.) (4) Financial condition of the party sought to be charged both before and after the transaction at issue. (See id. at 568-70.) (5) Existence or cumulative effect of the pattern or series of transactions or course of conduct after the incurring of debt, onset of financial difficulties, or pendency or threat of suits by creditors. (See id. at 570-71.) (6) General chronology of the events and transactions under inquiry. (See id. at 505, 563-68.) (7) Attempt by debtor to keep the transfer a secret. (See id. at 505, 572.)Watman emphasizes the last factor on appeal because he did notattempt to keep any of the transfers secret. (See Appellant Br.at 18-21.) All other objective indicia, however, point to afinding of intent, and as the First Circuit previously observed,"There is considerable force to Groman's claim that there is nological explanation for Watman's conduct here except an intent to delay, hinder, or defraud his creditors, particularly Groman."In re Watman, 301 F.3d at 10. Moreover, the bankruptcy courtfound that "Watman transferred virtually all of Children'sDental's entire business" (R. at 567), which constitutes anotherfactor pointing to fraudulent intent. See In re Lang,246 B.R. at 469 n. 9.
Therefore, based on the bankruptcy court's findings, this Courtaffirms the bankruptcy court's conclusion that Watman acted withactual "intent to hinder, delay, or defraud" his creditors(including Groman).
3. Harm to Creditors
Watman further claims that the bankruptcy court's finding that"Lowell Dentistry's use of certain assets harmed the creditors ofChildrens Dental was clearly erroneous." (Appellant Br. at 17.)This argument essentially attacks the bankruptcy court's findingregarding the fifth objective indicia of the "intent to hinder,delay, or defraud" analysis. See In re Watman, 301 F.3d at 8.
Watman argues that his use of Childrens Dental's assets couldnot harm its creditors because the bankruptcy court found that"the tangible assets were of inconsequential value to theestate." (See Appellant Br. at 17.) This argument, however, failsfor two reasons. First, Watman understates his use of ChildrensDental's assets by including only "tangible" assets. "The same evidence which supported a finding that [ChildrensDental's] operation had [intangible going concern] value alsosustains the finding that the bankrupt's estate suffered a lossto the extent of the transfer." Robinson, 685 F.2d at 735-36.Second, by emphasizing a portion of the bankruptcy court'sfinding out of context, Watman overstates the bankruptcy court'sfinding. The bankruptcy court did not find that all of ChildrensDental's tangible assets were inconsequential in value; rather,Judge Rosenthal found that the tangible assets of ChildrensDental left for liquidation after Watman's transfers hadinconsequential value. (See R. at 569-70.) As such, thebankruptcy court did not err in finding that the creditors ofChildrens Dental were harmed by Watman's actions.
B. Claimed Errors at Law
1. Scope of Inquiry on Remand from the First Circuit
Watman argues on appeal that the bankruptcy court "improperlyexpanded its inquiry to issues beyond the scope of the Court ofAppeals' mandate" by reexamining its findings regarding "intentto hinder, delay, or defraud." (See Appellant Br. at 24-26.)The "law of the case" limits the scope of inquiry on remand: In terms of the dynamics between trial and appellate courts, the phrase "law of the case" signifies, in broad outline, that a decision of an appellate tribunal on a particular issue, unless vacated or set aside, governs the issue during all subsequent stages of the litigation in the nisi prius court, and thereafter on any further appeal. As one commentary puts it: When a case is appealed and remanded, the decision of the appellate court establishes the law of the case and it must be followed by the trial court on remand. If there is an appeal from the judgment entered after remand, the decision of the first appeal establishes the law of the case to be followed on the second. It follows, then, that "when a case is decided by an appellate court and remanded . . . any questions that were before the appellate court and disposed of by its decree become the law of the case and bind the district court on remand."United States v. Rivera-Martinez, 931 F.2d 148, 150 (1st Cir.1991) (citations omitted). Here, the First Circuit could not"tell whether the bankruptcy court applied the correct definitionof transfer in its analysis," questioned the bankruptcy court's"ultimate [property] determinations about what was or was nottransferred between Childrens Dental and Lowell Dentistry," foundthe "bankruptcy court's analysis of the indicia of fraud wasincomplete," and "vacate[d] and remand[ed] for furtherproceedings consistent with [its] opinion." In re Watman,301 F.3d at 10-13. Therefore, Watman's argument relies on amisinterpretation of the First Circuit's opinion. The bankruptcycourt's reexamination of its "intent to hinder, delay, ordefraud" finding fell properly within the First Circuit's mandateand does not violate the "law of the case" doctrine.
2. Reversal of Factual Findings Without Additional Evidence
Watman also argues that "[i]t is clearly erroneous for a court to reach a completely different result based on the samelaw and identical facts that were before it at trial." (AppellantBr. 21.) While there is little case law on point, generally if atrial court on remand "perceives an error in its own formerproceedings, such as inconsistent findings of fact and the like,not touched upon by the appellate court, there would appear to beno reason why it could not change its former findings to anyextent not prohibited by the appellate court's mandate."19 A.L.R.3d 502 (2000); see also Imperial Chem. Indus. Ltd. v.Nat'l Distillers & Chem. Corp., 354 F.2d 459, 462 (2d Cir. 1965)("Nevertheless, it was within the power of the trial court tofind that it had been wrong the first time and reverse itself onthe facts."); Roe & Co. v. Armour & Co., 414 F.2d 862, 865 (5thCir. 1969) ("Although . . . the district court was not directedto reconsider its prior findings, it was nonetheless within thecourt's power on remand to find that it had been wrong the firsttime and reverse itself.").3
Here, Watman objects to the bankruptcy court reversing itsfindings on remand regarding "intent to hinder, delay, or defraud" without hearing any additional evidence. The FirstCircuit, however, directed the bankruptcy court to correct itsincomplete "analysis of the indicia of fraud" and specificallyquestioned its reliance on the testimony of Childrens Dental'scounsel: Watman claims that he formed Lowell Dentistry to preserve the assets of Childrens Dental, relying for that claim on testimony by counsel for Childrens Dental that Lowell Dentistry would turn over profits to Childrens Dental for payment of the debt to Groman. However, that arrangement was never memorialized in writing, is not in any way referenced in any written memoranda, and was not reported in Childrens Dental's bankruptcy schedules. The bankruptcy court does not mention any such arrangement in its decision. We discount this argument and turn to the evidence cited by the bankruptcy court.In re Watman, 301 F.3d at 8-9, 12 (emphasis added). Given suchlanguage, it is within the bankruptcy court's power to reverseits factual findings regarding "intent to hinder, delay, ordefraud" and not altogether surprising that after focusing onthis argument, the bankruptcy court ultimately reevaluated itsfindings with respect to the credibility of Watman and ChildrensDental's counsel. CONCLUSION
The bankruptcy court's ruling is AFFIRMED.