I built and own a small shopping center. My architect entered a 7% larger (than actual) area for one unit unknown to me and the architect. Tenant sued us for fraud. We successfully demurred but they successfully appealed and we went back to court. We won and were declared prevailing party. (You know what happened next.)

Only the wife had signed the lease (long story) but throughout depositions and trial the husband emphasized that this was a joint effort on their part. Plus California is a community property state. Just 19 days after the Judge ruled, they entered a mutual separation agreement, in which she transferred almost all her assets to her husband, including their home, even though they continue to reside in the home together. Later, only she filed for Chapter 7 protection.

Doesn't this look like a clear-cut 727(2) violation? The trustee at first indicated that she would pursue aggressively, even assigning a high-powered attorney to investigate but went on a three-week vacation instead. I had high hopes for their involvement (my tax dollars at work) but they are giving up. In retrospect, I don't think the Feds will persevere unless they smell 7 figures. I have strong reasons to believe that at least half that amount still exists but has been hidden.

My attorneys have filed for an extension and are working on a motion for a 2004 exam. What should I expect to happen next?