The bankrupt brought a motion to expunge or reduce a proof of claim filed by a creditor in the amount of $5,994,500, which the bankruptcy trustee had compromised and accepted at $2,580,000.
The claim was based on a promissory note related to a share purchase agreement.
The bankrupt argued that a subsequent oral governing agreement superseded the note, making it unenforceable until the bankrupt was repaid his investments, which never occurred.
The court found the creditor's evidence lacked credibility, noting his prior criminal convictions for fraud and his reliance on the governing agreement to obtain a lighter sentence in US criminal proceedings.
The court concluded the claim was not legitimate and reduced it to an $85,000 costs award.
