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IN RE KELLY

No. 87-1560.

841 F.2d 908 (1988)

In re Thomas G. KELLY III and Pauline A. Kelly, Debtor. Robert W. and Carolyn B. ZOLG and Tucson Realty & Trust Company, Appellants, and United States of America, Intervenor, v. Thomas G. KELLY III and Pauline A. Kelly, Appellees, and Alan Solot, Trustee in Bankruptcy.

United States Court of Appeals, Ninth Circuit.

Decided March 2, 1988.

Attorney(s) appearing for the Case

Michael McGrath, Stompoly & Stroud, Tucson, Ariz., for appellants.

Thomas G. Kelly III, Blaser, Kelly & Don, Tucson, Ariz., for appellees.

Scott A. Harbottle, Civil Div., Dept. of Justice, Washington, D.C., for intervenor.

Before SCHROEDER, POOLE and KOZINSKI, Circuit Judges.

KOZINSKI, Circuit Judge:

We consider whether the bankruptcy appellate panel erred in reversing the bankruptcy court's dismissal of appellees' chapter 7 bankruptcy petition as a "substantial abuse" of the Bankruptcy Code.

Background

Robert and Carolyn Zolg sold their home to the Kellys; Tucson Realty acted as the real estate agent for this transaction. Subsequently, the Kellys sued the Zolgs and Tucson Realty, charging fraud and breach of contract...

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