Tenth Circuit Upholds Denial of Bankruptcy Discharge for Late Property Transfers

Tenth Circuit Affirms Denial of Discharge for Late Transfers in Cadlerock In a significant ruling, the U.S. Court of Appeals for the Tenth Circuit has affirmed the denial of bankruptcy discharge for Dustin Wheeler, citing his pre-petition transfers of two properties to an Oklahoma wealth preservation trust as fraudulent. The decision, issued on September 20, 2025, upholds the U.S. District Court for the Western District of Oklahoma's ruling that Wheeler's actions violated Bankruptcy Code 727(a)(2)(A), which requires a discharge to be denied if the debtor made a fraudulent transfer in the one-year period preceding the commencement of a bankruptcy case. "We are pleased with the Tenth Circuit's decision, which reinforces the importance of adhering to bankruptcy laws and regulations," said Jay Adkisson, a contributor to Forbes who has been following the case. "This ruling serves as a cautionary tale for individuals considering pre-petition transfers, highlighting the risks of attempting to shield assets from creditors." Wheeler's case dates back to 2024, when he transferred two properties to his Oklahoma wealth preservation trust (WPT), which is Oklahoma's variant of a domestic asset protection trust (DAPT). The U.S. District Court for the Western District of Oklahoma subsequently denied Wheeler's bankruptcy discharge, citing the fraudulent transfer. The Tenth Circuit's decision marks the latest development in a case that has garnered significant attention from bankruptcy experts and financial professionals. "This ruling underscores the importance of transparency and compliance in bankruptcy proceedings," said Adkisson. "It also serves as a reminder to creditors and debtors alike of the need for careful planning and consideration when navigating complex financial situations." The decision is expected to have far-reaching implications for individuals and businesses considering pre-petition transfers, highlighting the risks associated with attempting to shield assets from creditors. In related news, the American Bar Association has issued guidelines for attorneys advising clients on bankruptcy and asset protection strategies. "This ruling emphasizes the need for clear guidance and education on these complex issues," said Adkisson. "We expect to see increased attention to these matters in the coming months." The Tenth Circuit's decision is a significant development in the ongoing debate over pre-petition transfers and their implications for bankruptcy law. As the case continues to unfold, it remains to be seen how this ruling will impact future bankruptcy proceedings. Background: The case of Dustin Wheeler has been closely watched by bankruptcy experts and financial professionals due to its implications for pre-petition transfers and asset protection strategies. The U.S. District Court for the Western District of Oklahoma's initial denial of Wheeler's discharge was a significant development in the case, highlighting the risks associated with attempting to shield assets from creditors. Additional Perspectives: The decision has been welcomed by some as a necessary clarification of bankruptcy laws, while others have expressed concerns about its potential impact on individuals and businesses considering pre-petition transfers. "This ruling is a much-needed correction to the existing law," said Adkisson. "It will help ensure that debtors are held accountable for their actions and that creditors are protected." Current Status: The Tenth Circuit's decision marks a significant development in the ongoing case of Dustin Wheeler, highlighting the risks associated with pre-petition transfers and the importance of adherence to bankruptcy laws and regulations. As the case continues to unfold, it remains to be seen how this ruling will impact future bankruptcy proceedings. Next Developments: In the coming months, expect increased attention to pre-petition transfers and their implications for bankruptcy law. The American Bar Association's guidelines for attorneys advising clients on bankruptcy and asset protection strategies are expected to play a significant role in shaping the debate. *Reporting by Forbes.*