                          UNPUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT


In Re: ANN OTTOSON-KING,                
                              Debtor.


ED POWERS; LUE POWERS,
               Plaintiffs-Appellees,              No. 00-1706

                 v.
ANN OTTOSON-KING,
             Defendant-Appellant.
                                        
           Appeal from the United States District Court
        for the Eastern District of Virginia, at Alexandria.
              Claude M. Hilton, Chief District Judge.
                (CA-00-251-A, BK-98-13983-SSM)

                      Argued: January 24, 2001

                      Decided: February 20, 2001

        Before MOTZ and TRAXLER, Circuit Judges, and
    Malcolm J. HOWARD, United States District Judge for the
     Eastern District of North Carolina, sitting by designation.



Affirmed by unpublished per curiam opinion.


                             COUNSEL

ARGUED: Joseph Francis Claffy, JOSEPH F. CLAFFY & ASSO-
CIATES, P.C., West Chester, Pennsylvania, for Appellant. John Ben-
2                       IN RE: OTTOSON-KING
jamin Raftery, DECKELBAUM, OGENS, REISER, SHEDLOCK &
RAFTERY, CHARTERED, Bethesda, Maryland, for Appellees. ON
BRIEF: Scott R. Sexauer, BECKER, HICKS, IRVING & HADEED,
P.C., Springfield, Virginia, for Appellant. Darryl A. Feldman, DECK-
ELBAUM, OGENS, REISER, SHEDLOCK & RAFTERY, CHAR-
TERED, Bethesda, Maryland, for Appellees.



Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).


                             OPINION

PER CURIAM:

   Ann Ottoson-King petitioned for bankruptcy under Chapter 7. Ed
and Lue Powers, creditors of Ottoson-King’s, objected to her dis-
charge. After a two-day trial, the bankruptcy court, ruling from the
bench, denied Ottoson-King a discharge on the ground that, under 11
U.S.C. § 727(a)(5) (1994), she had failed to explain adequately the
loss of assets that she had previously listed on financial statements.
Ottoson-King appeals the district court’s affirmance of that ruling.
We, too, affirm.

                                  I.

   Ottoson-King, an attorney, practiced law for twelve years until
1992 when her firm dissolved. After that, Ottoson-King and a partner
established a corporation known as American Coastal Ties Marines,
Inc. (ACT Marines). In February 1995, ACT Marines purchased the
assets of two companies owned by Mr. and Mrs. Powers. The pur-
chase of the Powers’ companies was financed by U.S. Bank in the
State of Washington. Business assets and the personal guarantees of
Ottoson-King and the Powers secured this bank loan. ACT Marines
folded in 1997 and, in 1998, Ottoson-King petitioned for bankruptcy.
After the dissolution of ACT Marines, the Powers were forced to
repay the loan to U.S. Bank. They subsequently obtained a judgment
against Ottoson-King in the amount of the bank loan, $1,116,937.70.
                         IN RE: OTTOSON-KING                          3
   In connection with the acquisition of the loan from U.S. Bank, in
February 1995, Ottoson-King submitted a financial statement to the
bank that stated her net worth as $1,942,993. That statement showed
$270,000 in savings, $260,000 in stocks and bonds, $1,195,000 in real
estate, a $50,000 claim against her former law firm, and $750,000 of
"appraised and certified antiques and jewelry." In May 1996, approxi-
mately one year later, Ottoson-King submitted a second financial
statement to U.S. Bank showing a net worth of $2,030,225. This state-
ment showed only nominal savings, but $250,000 in stocks,
$1,245,000 in real estate, $50,000 in an IRA account and, again,
$750,000 in antiques and jewelry.

   On her bankruptcy schedules, filed in June 1998, Ottoson-King
listed real estate of only $575,000, $50,000 in a joint bank account
with her husband, $600,000 in a joint brokerage account with her hus-
band, two IRA accounts totaling $50,000 and antiques and jewelry of
an unknown amount. Although she never formally amended her bank-
ruptcy schedules, when pressed by her Chapter 7 trustee at the meet-
ing of creditors, Ottoson-King furnished an itemized listing of
clothing, antiques and jewelry. That list included only $615 in heir-
looms and $500 in jewelry.

   At her deposition, Ottoson-King was asked about the difference
between the $750,000 in antiques and jewelry shown on the 1996
financial statement and the approximately $1100 in antiques and jew-
elry listed on the bankruptcy schedule. Ottoson-King answered that
she did not know and did not remember which items she believed, in
1995 and 1996, were worth $750,000. When asked if she had any
jewelry or antiques worth $750,000, Ottoson-King replied that she
must have believed that she did at the time she completed the finan-
cial statements, but that she did not know if she did, in fact, have any
items worth that amount. She did acknowledge that she had not dis-
posed of any antiques or jewelry listed in the financial statements
since February 1995, nor had such items depreciated. When asked to
account for the discrepancy between the earlier financial statements
and the bankruptcy schedules, Ottoson-King answered that she did
not know if anything had happened to the assets that would cause the
discrepancy.

   Another large, allegedly missing, asset is the $250,000 in stocks
listed on Ottoson-King’s 1996 U.S. Bank financial statement. These
4                        IN RE: OTTOSON-KING
stocks were not listed on Ottoson-King’s bankruptcy schedule; rather,
on the schedule, the only similar item Ottoson-King listed was a
$600,000 brokerage account held as a tenancy by the entirety with her
husband. At trial, Ottoson-King stated that the stocks listed on the
1996 financial statement may have been part of the $600,000 broker-
age account listed on her bankruptcy schedule, but she was not cer-
tain. She attempted to explain her confusion by stating that her
husband handled the finances in her family. The bankruptcy court
found this explanation unsatisfactory because Ottoson-King was not
an unsophisticated party, but rather a businesswoman with a law
degree, an MBA, and many credits toward an MLA, and because
there was no reason why she could not remember the events of only
a few years ago.

   Ottoson-King’s husband also testified at the trial. In his testimony,
he indicated that he did not believe that his wife possessed antiques
or jewelry worth $750,000 in either May 1996, or at the time of bank-
ruptcy. He stated that he owned some antiques but that he did not
know their value. He had not disposed of any antiques between 1996
and 1998.

   The bankruptcy court concluded that Ottoson-King "gave no satis-
factory response" to the questions concerning the loss of assets previ-
ously listed on her financial statements. The court recognized that
Ottoson-King had testified that, on the instruction of a U.S. Bank offi-
cer, she had included both her and her husband’s assets in the 1996
financial statement, and that the bank officer’s deposition testimony
neither confirmed nor refuted Ottoson-King’s assertion. The bank-
ruptcy court found, however, that financial statement itself did not
indicate whether particular assets were solely or jointly owned. For
these reasons, the bankruptcy court refused to discharge Ottoson-
King. The district court affirmed this ruling on the reasoning of the
bankruptcy court.

                                  II.

   In bankruptcy cases, we review the district court’s judgment de
novo, and the bankruptcy court’s findings of fact for clear error and
its conclusions of law de novo. See In re Tudor Assosc., Ltd., II, 20
F.3d 115, 119 (4th Cir. 1994). In reviewing the bankruptcy court’s
                          IN RE: OTTOSON-KING                             5
findings of fact, we must give "due regard . . . to the opportunity of
the bankruptcy court to judge the credibility of the witnesses." Fed.
R. Bankr. P. 8013.

   The Bankruptcy Code provides that a debtor should be denied a
discharge if "the debtor has failed to explain satisfactorily . . . any loss
of assets or deficiency of assets to meet the debtor’s liabilities." 11
U.S.C. § 727(a)(5). This statute "gives a court broad power to decline
to grant a discharge in bankruptcy where the debtor does not ade-
quately explain a shortage, loss, or disappearance of assets." In re
Martin, 698 F.2d 883, 886 (7th Cir. 1983). "In a proceeding involving
Section 727(a)(5), the initial burden is on the party objecting to a dis-
charge to produce evidence establishing the basis for his objection
whereupon the burden shifts to the debtor to explain satisfactorily the
loss or deficiency of assets." In re Farouki, 133 B.R. 769, 777 (Bankr.
E.D. Va. 1991), aff’d 14 F.3d 244, 251 (4th Cir. 1994); In re Chalik,
748 F.2d 616, 619 (11th Cir. 1984). The question of whether a debtor
has satisfactorily explained a loss of assets is a question of fact.
Chalik, 748 F.2d at 619. The debtor’s explanation must be "reason-
able and credible so as to satisfy the court that the creditors have no
cause to wonder where the assets went." Farouki, 133 B.R. at 777; In
re Hendren, 51 B.R. 781, 788 (Bankr. E.D. Tenn. 1985). "The failure
to offer documentary evidence to corroborate a debtor’s testimony as
to the loss or disposition of assets may justify the denial of a dis-
charge pursuant to Section 727(a)(5)." Farouki, 133 B.R. at 777 (cit-
ing Chalik, 748 F.2d at 619).

  Before us, Ottoson-King advances two principal reasons why we
should reverse the district court and the bankruptcy court.

   First, Ottoson-King contends that the Powers, as the objecting
creditors, never proved the existence of the allegedly missing assets,
as they are required to do. To that end, Ottoson-King notes that her
bankruptcy schedule listed approximately $400,000 more in personal
property than did her 1996 financial statement. According to Ottoson-
King, this means that there were no missing assets. The argument
fails.

  Under § 727(a)(5), objecting creditors do not have to prove that the
debtor acted knowingly or fraudulently in listing her assets or in with-
6                         IN RE: OTTOSON-KING
holding any information. Compare 11 U.S.C. § 727(a)(4) with 11
U.S.C. § 727(a)(5). Rather, all an objecting creditor need do is iden-
tify missing assets; once that is done, the debtor must explain in a sat-
isfactory manner the loss of those assets. The 1996 U.S. Bank
financial statement was sufficient to satisfy the objecting creditors’
burden of identifying missing assets. See In re Potter, 88 B.R. 843,
849 (Bankr. N. D. Ill. 1988) (relying on financial statement to show
existence of assets); In re Savel, 29 B.R. 854, 856 (Bankr. S.D. Fla.
1983) (same). Ottoson-King simply failed to carry her burden of
explaining in a satisfactory manner the loss of these assets.

   This is true even though Ottoson-King’s bankruptcy schedules
listed several hundred thousand dollars more in personal property
than did the 1996 financial statement; while the personal property
listed in the bankruptcy schedule had a higher total value, there was
still a large discrepancy between the $750,000 in antiques and jewelry
listed in the 1996 financial statement and the approximately $1100 of
antiques and jewelry listed in the bankruptcy schedules. Moreover,
the bankruptcy court was correct in its ruling that Ottoson-King had
not adequately explained the disappearance of the $250,000 in stocks
listed on her 1996 financial statement. Ottoson-King did not state
with certainty whether the stocks she listed in the 1996 financial state-
ment were part of the $600,000 brokerage account held with her hus-
band. By failing to do so, she left open the possibility that in 1996 she
individually held $250,000 worth of stocks that are not listed in her
bankruptcy schedule. The Powers, therefore, met their burden of
showing that assets that had previously existed no longer appeared to
exist.

   Alternatively, Ottoson-King argues that the assets listed on her
1996 financial statement were not available to pay her liabilities, as
required by § 727(a)(5), because the statement included assets that
belonged solely to her husband or were held as tenancies by the
entirety.* Noting that Washington is a community property state,

   *Ottoson-King also maintains that the financial statements showing
her pre-petition assets were not disclosed to the Powers at the time they
were completed, and thus the Powers’ claim must fail because they did
not rely on her financial statements in deciding to guarantee the bank
loan. This argument is entirely without merit. There is no authority hold-
ing that a creditor must rely on a pre-petition financial statement in order
to obtain relief under § 727(a)(5).
                          IN RE: OTTOSON-KING                           7
Ottoson-King maintains that a bank officer instructed her to include
such jointly held assets on her financial statement, although her bank-
ruptcy schedule, filed in Virginia, omitted these assets. The bank-
ruptcy court, with good reason, found this explanation unsatisfactory.

   As the Powers point out, during the same period in which Ottoson-
King completed the 1996 financial statement for U.S. Bank, she sent
a personal financial statement to Mr. Hagy, a businessman engaged
by ACT Marines to assist the company in working out its financial
and management difficulties. The values of the assets listed in this
financial statement are virtually identical to those set forth in the 1996
U.S. Bank financial statement, and in the Hagy financial statement,
Ottoson-King specifically stated that she was not relying on any com-
munity property or her spouse’s income to show her creditworthiness.
This casts doubt on Ottoson-King’s claim that the allegedly missing
assets that she listed in her 1996 U.S. Bank statement were her hus-
band’s heirlooms and jewelry, which she listed only because she was
instructed to do so. Furthermore, although Ottoson-King makes much
of the fact that Washington is a community property state, Ottoson-
King herself was never a resident of Washington; rather King resides
in Virginia, which is not a community property state, suggesting that
she never possessed any community property. Ottoson-King was
apparently aware of this distinction because, on the U.S. Bank finan-
cial statement, she did not complete the portion containing a series of
questions for applicants who do live in community property states.

   For all of these reasons, the judgment of the district court affirming
the bankruptcy court’s refusal to discharge Ottoson-King is

                                                            AFFIRMED.
