In re: Steven T. Savage; Virginia A. Savage v. Steven T. Savage; Virginia A. Savage

United States Court of Appeals
For the First Circuit
No. 25-1249
IN RE: STEVEN T. SAVAGE; VIRGINIA A. SAVAGE,
Debtors,
COASTAL CAPITAL, LLC,
Appellee,
v.
STEVEN T. SAVAGE; VIRGINIA A. SAVAGE,
Appellants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
[Hon. Steven J. McAuliffe, U.S. District Judge]
Before
Gelpí, Thompson, and Montecalvo,
Circuit Judges.
Stephen T. Martin, with whom The Law Offices of Martin &
Hipple, PLLC was on brief, for appellants.
Thomas J. Pappas, with whom Primmer Piper Eggleston & Cramer,
P.C. was on brief, for appellee.
February 27, 2026

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THOMPSON, Circuit Judge. Filing for bankruptcy offers
insolvent debtors a path toward a fresh start. But, before they
can obtain their sought-after relief via a discharge, debtors must
provide a basic rundown of their financial condition and
satisfactorily explain any apparent loss of assets during the
lead-up to their filing for bankruptcy. Here, the United States
Bankruptcy Court for the District of New Hampshire found that
appellants Steven and Virginia Savage ("the Savages") did not
satisfactorily explain the disposition of their assets and
consequentially denied the couple a discharge. The United States
District Court for the District of New Hampshire upheld this
decision, and, after due consideration, we affirm.
I
Debtors filing for Chapter 7 bankruptcy may "obtain a
'fresh start' by discharging nearly all previously incurred
debts." In re Shove, 83 F.4th 102, 106 (1st Cir. 2023) (quoting
In re Curran, 855 F.3d 19, 22 (1st Cir. 2017)). But not all
debtors walk unimpeded to their fresh starts as "certain behavior
may preclude the granting of a discharge." In re Simmons, 810
F.3d 852, 855 (1st Cir. 2016). We need only introduce one type of
preclusive behavior relevant to this appeal (although the
Bankruptcy Code defines several others, see 11 U.S.C. § 727(a)).
A bankruptcy court may deny a discharge when "the debtor has failed
to explain satisfactorily, before determination of denial of

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discharge . . . any loss of assets or deficiency of assets to meet
the debtor's liabilities." Id. § 727(a)(5).
With this statutory requirement in mind, we turn to the
case at hand. We draw the facts from those found by the bankruptcy
and district courts, which are largely undisputed by the parties.
See In re NTA, LLC, 380 F.3d 523, 524 (1st Cir. 2004). In doing
so, we relay only those facts pertaining to the issues raised on
appeal.
The story opens with a company called Sky-Skan
Incorporated. Sky-Skan designed, installed, and maintained
digital equipment used in planetariums around the world. Steven
Savage was Sky-Skan's president and sole shareholder while
Virginia Savage was Sky-Skan's vice president and bookkeeper. In
July 2011, Bank of America provided Sky-Skan with a $900,000 line
of credit secured by Sky-Skan's property and personally guaranteed
by the Savages. Steven Savage's personal guarantee was further
secured by his mortgage on a commercial condominium in Nashua, New
Hampshire, where Sky-Skan operated its business.
In April 2017, Bank of America assigned its loan to
appellee Coastal Capital, LLC ("Coastal" to save keystrokes).
Shortly thereafter, Sky-Skan fell into financial trouble and could
no longer obtain new lines of credit. To help their ailing
company, the Savages dipped into their own pockets to cover

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Sky-Skan's operational expenses using personal funds and credit
cards.
But, even with the Savages' support, Sky-Skan defaulted
on its obligations to Coastal. Sky-Skan's default kicked off a
series of legal proceedings, first in state court to prevent
Sky-Skan and the Savages from moving or concealing the collateral
securing its obligations, and later in federal bankruptcy court
after Sky-Skan filed a Chapter 11 bankruptcy petition.1 During
its bankruptcy proceedings, Sky-Skan filed a statement of
financial affairs ("SOFA") and schedules of its assets and
liabilities as required by 11 U.S.C. § 521(a)(1). These Sky-Skan
documents were signed by Steven Savage under the pains and
penalties of perjury. Sky-Skan's SOFA disclosed $704,075 in
payments to the Savages for "Expense Reimbursement for use of
credit cards, travel expenses, rent and repayment of personal
loans" in the one-year period before Sky-Skan filed for bankruptcy.
The Savages soon followed their languishing company into
bankruptcy and filed their own petition in December 2017.2 Much
1 Chapter 11 bankruptcy, also known as reorganization
bankruptcy, enables businesses (and sometimes individuals) with
significant debt to restructure their financial obligations while
continuing operations under court supervision. It also halts
creditor collection efforts, allowing for a payment plan to be
negotiated, ultimately aiming to return the entity to
profitability or provide a fresh start. See generally Truck Ins.
Exch. v. Kaiser Gypsum Co., 602 U.S. 268, 272 (2024) (discussing
Chapter 11 bankruptcy).
2 The Savages initially filed for Chapter 11 bankruptcy but

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like Sky-Skan, the Savages submitted their own SOFA and schedules
as part of their bankruptcy proceedings, but their disclosures
reported no income from employment nor from operating a business
in the three calendar years leading up to their bankruptcy
petition. Critically, the Savages' SOFA and schedules did not
disclose the $704,075 transferred from Sky-Skan to the Savages
between November 2016 and November 2017.
While the Savages' bankruptcy proceedings were underway,
Coastal filed an adversary complaint objecting to the Savages'
eligibility for a Chapter 7 discharge.3 Coastal's complaint set
forth six counts under federal bankruptcy law as to why it believed
the Savages should be denied a discharge. After a motion to
dismiss filed by the Savages (which the bankruptcy court denied)
and cross motions for summary judgment (which the bankruptcy court
mostly denied but granted in part), Coastal and the Savages
proceeded to a bench trial to decide counts I-III and the surviving
parts of counts IV-VI.
later converted their case to a Chapter 7 bankruptcy. Chapter 7
bankruptcy petitions are more common for individuals (as opposed
to corporations) and provide a path toward a discharge.
3 In essence, "an adversary proceeding is a subsidiary lawsuit
within the larger framework of a bankruptcy case." Fin. Oversight
& Mgmt. Bd. for P.R. v. Cooperativa de Ahorro y Crédito Abraham
Rosa, 54 F.4th 20, 26 n.1 (1st Cir. 2022) (citation modified).
The goals of an adversary proceeding vary, but typically seek
recovery of money or property, a discharge determination, or to
subordinate certain claims.

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The bench trial before the bankruptcy court lasted two
days with Steven and Virginia Savage providing the only testimony.
The court heard argument, received post-trial briefing, and
ultimately found in the Savages' favor on all counts except count
III. That count of Coastal's complaint accused the Savages (as we
just detailed above) of receiving "hundreds of thousands of dollars
from Sky-Skan" in the year leading up to their bankruptcy petition
but failing "to satisfactorily explain the reason that said money
is not available to satisfy their liabilities." The bankruptcy
court found it undisputed that the Savages received $704,075.27
from Sky-Skan during the year leading up to bankruptcy. But the
court also found that the Savages presented evidence regarding the
disposition of $684,599.42 worth of those particular funds. Thus,
on the bankruptcy court's initial tally, the disposition of
$19,475.85 in funds remained unknown.
But the bankruptcy court did not stop there. It also
found gaps in the Savages' explanation related to $89,500's worth
of the Sky-Skan money reportedly paid as rent to the couple to
operate out of the Savages' New Hampshire commercial condominium.
The court noted that the Savages were consistently collecting rent
from Sky-Skan on the condo but not consistently paying the
mortgage. So, because the Savages did not use Sky-Skan's rent
money to pay the monthly mortgage on the condo for seven months,
the bankruptcy court added an additional $15,151.29 to the

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unaccounted-for funds column ($2,164.47 a month in missed mortgage
payments times seven months).
The court went on to identify further missing funds
related to this rental income. At trial, Virginia Savage testified
that the Savages increased Sky-Skan's monthly rent from $4,000 a
month to $8,000 a month so that they could stop receiving a salary
and reduce Sky-Skan's tax burden.4 Based on this testimony, the
court attributed $4,000 a month as salary that the Savages used to
pay for personal expenses like housing, utilities, and food. But
even then, with $4,000 a month accounted for as salary and
$2,164.47 a month accounted for as mortgage debt on the condo
(whether paid or unpaid), that left $1,835.53 out of Sky-Skan's
$8,000 a month rent payments unaccounted for. The court multiplied
that $1,835.53 figure by twelve resulting in another $22,026.36 in
unaccounted-for funds. After adding everything together, the
court reached a final figure of $56,653.50 in unexplained proceeds.
From there, the bankruptcy court concluded the Savages
had failed to satisfactorily explain this deficiency and
4 The bankruptcy court noted that, even though Virginia Savage
said that they charged Sky-Skan $8,000 a month in rent, it only
paid the Savages this amount for two months between November 2016
and November 2017. In reality, Sky-Skan's rent payments varied
drastically with a low of $550 in January 2017 and a high of
$18,200 in March 2017. So, even though $89,500 in rent payments
breaks down to approximately $7,458.34 a month, the court used
Virginia's testimony and based its calculations off $8,000 a month
in rent payments.

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consequentially denied them a discharge under 11 U.S.C.
§ 727(a)(5). In other words, the court ruled in Coastal's favor
on only count III of the adversary complaint, but that was enough
to prevent the Savages from obtaining a discharge. The Savages'
post-judgment motions were denied by the bankruptcy court, and the
bankruptcy court's decision on count III was later upheld on appeal
by the district court. The Savages timely beseeched our court to
conduct yet another review of the bankruptcy court's count III
decision and its denial of a discharge pursuant to 11 U.S.C.
§ 727(a)(5).
II
Appellate review in bankruptcy cases proceeds in two
steps: litigants must first appeal to the district court (or a
bankruptcy appellate panel) and then the courts of appeals may
provide a "second tier of appellate review." In re Simmons, 810
F.3d at 856; see 28 U.S.C. § 158(a)-(b), (d). Once the case
travels to our court, "we accord no special deference to
determinations made by the first-tier appellate tribunal but,
rather, train the lens of our inquiry directly on the bankruptcy
court's decision." In re Simmons, 810 F.3d at 857 (citation
modified).
We review the bankruptcy court's findings of fact for
clear error and its conclusions of law de novo. E.g., In re
Montr., Me. & Atl. Ry., Ltd., 956 F.3d 1, 6 (1st Cir. 2020). The

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decision of whether to grant or withhold a discharge presents a
mixed question of law and fact. In re Carp, 340 F.3d 15, 25 (1st
Cir. 2003). We review claims of this ilk for clear error unless
the bankruptcy court's analysis rests atop of legal
error -- meaning we will not set aside the bankruptcy court's
conclusions "unless, on the whole of the record, we form a strong,
unyielding belief that a mistake has been made." Id. at 22
(citation modified).
A
To better elucidate (and resolve) the Savages' appellate
asseverations, we first set forth the pertinent burden-shifting
framework. As touched on in our statutory introduction,
§ 727(a)(5) "authorizes the bankruptcy court to deny a discharge
when a debtor has experienced a loss of assets or some other
deficiency that the debtor cannot satisfactorily explain." In re
Simmons, 810 F.3d at 859. A burden-shifting framework applies to
claims under this provision: the party seeking to prevent a
discharge must first show that the debtor has not accounted for
previously owned assets or income, then, after that showing, the
burden shifts to the debtor to satisfactorily explain the
deficiency (as in, tell us what happened to the money). Id. at
860. A satisfactory explanation "'must be supported by at least
some corroboration,' and it 'must be sufficient to eliminate the
need for any speculation as to what happened to all of the

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assets.'" Id. (emphasis added) (quoting In re Aoki, 323 B.R. 803,
817 (B.A.P. 1st Cir. 2005)).
The Savages' arguments relate to how the bankruptcy
court interpreted and applied § 727(a)(5) after the burden had
shifted to them to satisfactorily explain what happened to the
$704,075.27 in Sky-Skan money.5 The Savages first claim that the
bankruptcy court's decision to deny them a discharge rests on a
mistaken interpretation of § 727(a)(5). According to the Savages,
the statute only permits denial of a discharge when the lost assets
at issue are substantial -- a term they loosely define (at times)
to mean assets capable of meeting their outstanding liabilities.6
So, because they satisfactorily explained their deficiency as to
5 The Savages did not dispute below and agree on appeal that
they received $704,075.27 from Sky-Skan in the year preceding their
bankruptcy petition. So, even though the Savages' statutory
interpretation arguments at times seem to implicate the bankruptcy
court's decision to shift the burden on to them, the Savages have
waived their ability to raise this argument. See, e.g., Punsky v.
City of Portland, 54 F.4th 62, 67 (1st Cir. 2022) (explaining that
claims not squarely raised before the trial court are waived on
appeal). Moreover, the Savages have failed to provide any
developed argument that the bankruptcy court erred in shifting the
burden onto them, giving us further cause to deem this claim
waived. See United States v. Zannino, 895 F.2d 1, 17 (1st Cir.
1990).
6 We say "at times" because the Savages offer several
theoretical and ranging definitions for what constitutes a
"substantial" asset, including 51% or more of any outstanding
liabilities, "considerable in quantity; significantly great," and
simply "something much more than what was unaccounted-for here."
Nonetheless, their inability to land on one definition is
immaterial to our decision.

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all but a relatively small portion that would not have covered
their outstanding liabilities, the Savages believe the bankruptcy
court legally erred by denying their discharge over such a trivial
amount. And if we disagree with their interpretation of the
relevant statute, the Savages lodge further challenges to the
bankruptcy court's calculation of the unaccounted-for assets and
the court's decision not to credit their good faith explanation
for most of the deficiency. The Savages also accuse Coastal of
destroying documents in its possession that they say would have
explained where the Sky-Skan money went. We discuss each argument
in turn, starting with the Savages' statutory interpretation
arguments.
B
The Savages claim that 11 U.S.C. § 727(a)(5) "requires
the plaintiff to prove that the defendant owned a substantial asset
that it no longer owns." (emphasis added on behalf of the Savages).
And, because the unaccounted-for portion of the funds "was not
substantial or able to meet the Savages' liabilities, they provided
a satisfactory explanation as a matter of law." As Coastal eagerly
points out and the Savages concede, the term "substantial" does
not appear in the statutory text. See 11 U.S.C. § 727(a)(5). So
the Savages not only read an extra term into the statute, but argue
that this term carries significant weight in their appeal such

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that the bankruptcy court erred by requiring them to explain the
loss of an insubstantial amount.
The interpretation of the Bankruptcy Code is a legal
question that we review de novo. In re Christo, 192 F.3d 36, 37
(1st Cir. 1999). Questions of statutory interpretation start with
the statutory text. E.g., In re Ruiz, 122 F.4th 1, 13 (1st Cir.
2024). As we just laid out (as plainly as it gets), the Savages'
reading of § 727(a)(5) requires inserting the word "substantial"
into the statute, something we cannot do. Vicor Corp. v. FII USA
Inc., 132 F.4th 1, 7 (1st Cir. 2025) (citing Romag Fasteners, Inc.
v. Fossil, Inc., 590 U.S. 212, 215 (2020)). Rather, the statutory
text explicitly precludes a discharge where "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)
(emphasis added); see also In re Simmons, 810 F.3d at 860
(requiring a debtor to explain "what happened to all of the assets"
(quoting In re Aoki, 323 B.R. at 817)). The Savages'
interpretation would not only insert a new term (and an elusive
new standard for courts to apply) but also render the phrase "any
loss of assets or deficiency" superfluous. E.g., Woo v. Spackman,
988 F.3d 47, 51 (1st Cir. 2021) ("[I]t is apodictic that we should
avoid, when possible, interpretations of a statute that will render
words in the statutory text superfluous."). Therefore, we reject
the Savages' interpretation and hold that the bankruptcy court did

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not err when interpreting § 727(a)(5). See In re Simmons, 810
F.3d at 859-60 (explaining 11 U.S.C. § 727(a)(5) and its burden
shifting framework sans reference to a requirement that a loss of
assets or deficiency must be substantial).
The Savages' attempt to persuade us differently with
caselaw falls equally short. The Savages cite a case from the
First Circuit Bankruptcy Appellate Panel that further quotes a
case from the United States Bankruptcy Court for the Northern
District of Illinois in support of their interpretative theory.
To the Savages' credit, that quotation does state "[o]nce the
creditor has introduced some evidence of the disappearance of
substantial assets, the burden shifts to the Debtor to explain
satisfactorily the losses or deficiencies." In re Brien, 208 B.R.
255, 258 (B.A.P. 1st Cir. 1997) (emphasis ours) (quoting In re
Potter, 88 B.R. 843, 849 (Bankr. N.D. Ill. 1988)). But neither
that case nor its quoted source considered the specific issue
raised by the Savages, and neither case required the debtor's lost
assets to be "substantial" as the Savages request. See id.
(dismissing a complaint because appellants/creditors failed to
initially allege facts demonstrating the existence of any loss or
how the property disappeared); In re Potter, 88 B.R. at 849
(finding that plaintiffs/creditors made a prima facie case under
11 U.S.C. § 727(a)(5) without any consideration of whether lost

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assets were substantial).7 So we're left with neither the
statutory text nor the Savages' citations to caselaw to support
their argument that § 727(a)(5) requires a substantial loss of
assets or deficiency to deny a discharge.
In a similar vein, the Savages push another theory of
statutory interpretation that is often indistinguishable in their
briefing from their first argument. They argue that § 727(a)(5)
does not require a debtor to satisfactorily explain
unaccounted-for funds if the missing funds wouldn't be enough to
pay back the debtor's outstanding liabilities. Here (as opposed
to their previous claim), the Savages favorably cite § 727(a)(5)'s
text which refers, in relevant part, to "any loss of assets or
deficiency of assets to meet the debtor's liabilities." (emphasis
added). So, the argument goes, because the missing and unexplained
money here wasn't enough "to meet" the Savages' liabilities (as
7 The Savages cite other bankruptcy cases, but none apply or
even support the theory of interpretation they ask us to adopt.
For instance, the Savages cite In re Bajgar, 104 F.3d 495, 497
(1st Cir. 1997), for the proposition that "[t]he development of
the 'substantial asset' test likely resulted from interpreting the
legislative intent in accordance with Section 727(a)(5)'s plain
language." But In re Bajgar discusses a different provision of
the Bankruptcy Code related to fraudulent transfers, 11 U.S.C.
§ 727(a)(2)(A), and the statutory interpretation principles
discussed therein point us to "the text of the statute itself."
In re Bajgar, 104 F.3d at 497 (citation omitted). In other words,
the case cited says nothing about the substantial asset theory
peddled by the Savages under § 727(a)(5) nor provides a canon of
construction that could plausibly support their theory.

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in, to pay those liabilities in full), the bankruptcy court erred
in finding their explanation unsatisfactory. Call us unconvinced.
To support this claim, the Savages break out their
dictionaries and argue that "to meet," as used in § 727(a)(5),
must mean "to satisfy" or "to pay fully." Even assuming this
definition for the isolated text is plausible, the Savages'
interpretation rapidly falls apart in the context of the statute,
caselaw, and common sense. Allow us to briefly say more to each
point.
First, the Savages' theory runs afoul of basic
bankruptcy principles and the context surrounding § 727(a)(5).
Chapter 7 bankruptcy can forgive an insolvent individual for unpaid
debts "by authorizing a discharge of prepetition debts following
the liquidation of the debtor's assets by a bankruptcy trustee,
who then distributes the proceeds to creditors." In re Buscone,
61 F.4th 10, 20 (1st Cir. 2023) (citation modified). When
proceedings begin, before any consideration of a discharge,
debtors must fully disclose the extent of their assets. Id. at
20-21. Once a debtor's assets are on the table, "her interests in
property are either compiled into the bankruptcy estate from which
(to the extent the estate can afford) her creditors will be paid,
or those interests are exempted from the estate for the debtor to

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keep." Id. at 20 (citation modified).8 In other words, some
assets may stay with debtors while other assets will be liquidated
and used to pay creditors (or, spoiler alert, used "to meet" the
debtor's outstanding liabilities).
A denial of a discharge under § 727(a)(5) only
implicates the class of assets belonging to the bankruptcy estate
available to pay a debtor's liabilities. See In re Cimenian,
No. 24-1250, 2025 WL 2652996, at *2 (Mar. 24, 2025) (affirming the
bankruptcy court's § 727(a)(5) holding because plaintiff failed to
prove "a loss of assets to the bankruptcy estate"); In re Aoki,
323 B.R. at 817 (explaining the consequences of corporate assets
becoming attributable to the bankruptcy estate as "any loss or
reduction of those assets could form the basis for denying a
discharge under § 727(a)(5)"). Herein lies the parry to the
Savages' novel thrust of interpretation. A debtor must
satisfactorily explain any loss of assets that would have been
available "to meet the debtor's liabilities," but does not have a
parallel obligation to explain lost assets that otherwise did not
belong to the bankruptcy estate and would not have been available
to pay creditors. 11 U.S.C. § 727(a)(5). Therefore, we reject
8 For example, one exemption (commonly called a "homestead
exemption") can protect a debtor's interest in their home. In re
Rockwell, 968 F.3d 12, 18 (1st Cir. 2020); see also N.H. Rev. Ann.
§ 480:4 (codifying New Hampshire's version of a homestead
exemption).

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the Savages' expansive interpretation of "to meet" as used in
§ 727(a)(5) and view it merely as referring to the class of assets
available to meet a debtor's liabilities.
Second, the Savages provide no support in our caselaw
(or elsewhere) for reading § 727(a)(5) as they request. Instead,
the caselaw repeatedly shows courts reviewing a debtor's
explanation of lost assets without considering any outstanding
liabilities or whether the unaccounted-for assets would cover
those liabilities in full. See In re Simmons, 810 F.3d at 860;
see also In re Ward, 978 F.3d 298, 306-07 (5th Cir. 2020)
(reviewing a debtor's explanation for lost assets without
reference to whether those assets could fully pay any outstanding
liabilities); In re Elian, 659 F. App'x 104, 107 (3d Cir. 2016)
(same); In re Retz, 606 F.3d 1189, 1205-06 (9th Cir. 2010) (same);
In re Chalik, 748 F.2d 616, 620 (11th Cir. 1984) (same). The
Savages' interpretation would require us to believe previous
courts interpreting § 727(a)(5) overlooked a crucial element of
this inquiry: a debtor's outstanding liabilities. We'll decline
that invitation and instead read our caselaw and the persuasive
interpretations offered in our sister circuits as further support
for rejecting the Savages' construction.
And third, we hasten to add that the Savages'
interpretation of § 727(a)(5) contravenes common sense. See,
e.g., United States ex rel. Omni Healthcare Inc. v. MD Spine Sols.

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LLC, 160 F.4th 248, 261 (1st Cir. 2025) (noting how "common sense"
plays a role in statutory interpretation (citation omitted)).
Taken to its extreme, under the Savages' requested interpretation,
a debtor with $1,000,000 in outstanding liabilities would not need
to satisfactorily explain a $999,999 deficiency because that total
unaccounted-for money would be insufficient to meet the debtor's
liabilities. Or, under more likely circumstances, debtors with
ballooning liabilities (say nearly $3,500,000, for example) would
not need to satisfactorily explain millions of dollars in lost
assets because those assets couldn't satisfy their outstanding
liabilities. Cf. In re Simmons, 810 F.3d at 855, 860 (affirming
a denial of discharge of "nearly $3,500,000 in unsecured debt"
where the debtor failed to explain "the loss of millions of dollars
in assets"). We decline to construe § 727(a)(5) to produce such
absurd results.
Not so fast. The Savages argue our interpretation would
produce absurdity at the opposite extreme, that a bankruptcy court
could deny a discharge if only $1 was missing but a debtor had
$1,000,000 in outstanding liabilities. Perhaps it could, but,
luckily for the Savages and future debtors, the statute and our
precedent provide two layers of protection against this
hypothetical $1 discharge denial. Recall that a party seeking to
prevent a discharge has the initial burden of producing some
evidence that the debtor "has not accounted for previously owned

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assets or previously earned income." In re Simmons, 810 F.3d at
860. This initial burden protects debtors from a denial of
discharge due to $1 because a plaintiff would need to somehow
produce evidence that the debtor previously owned that dollar but
did not account for it in their bankruptcy filings. See In re
McNamara, 620 B.R. 178, 192 (Bankr. D. Mass. 2020) (requiring a
lost asset to be "actual" and not "theoretical"). Furthermore,
even if a plaintiff could prove the existence of an unaccounted-for
dollar, the debtor then has the opportunity to satisfactorily
explain to the court how that dollar was used. And, although the
bankruptcy court has discretion to decide whether an explanation
is satisfactory, see In re Aoki, 323 B.R. at 817, the § 727(a)(5)
exception to discharge -- like all exceptions to discharge -- is
to be construed in favor of the debtor in furtherance of the
Bankruptcy Code's "fresh start" policy, see In re Stewart, 948
F.3d 509, 520 (1st Cir. 2020); see also In re Carp, 340 F.3d at 25
("[E]xceptions to discharge should be construed narrowly."). So,
to summarize bluntly, it is difficult to prove a dollar is missing
and easy to satisfactorily explain to the bankruptcy court where
a dollar went.
Having discerned no legal error in the bankruptcy
court's interpretation of § 727(a)(5), we may proceed to the
Savages' remaining claims.

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C
The Savages next argue that the bankruptcy court erred
in calculating the amount of assets left unaccounted-for.
According to the Savages' view of the evidence, the unaccounted-for
funds should have totaled $11,684.71, instead of $56,653.50. Our
review of the bankruptcy court's factual finding is for clear
error -- a formidable standard where we will not reverse so long
as the bankruptcy court reached a supportable result in light of
the record. See In re Shove, 83 F.4th at 110-11.
The bankruptcy court's calculation is unshakeable. As
Coastal points out, the court's order explains the exact testimony,
evidence, and calculation it used to arrive at $56,653.50 in
unaccounted-for funds. The Savages' appellate argument is nothing
more than their preferred view of the same record evidence and,
concerningly, their view of purported record evidence they did
not, in fact, present at trial. Indeed, the Savages concede in
their appellate briefing that they did not testify at trial about
the schedule they now claim would have accounted for a portion of
their missing assets. Therefore, even assuming the Savages'
interpretation of their evidence produces a plausible ledger for
their unaccounted-for funds, it does not prove the bankruptcy court
clearly erred. See Cumpiano v. Banco Santander P.R., 902 F.2d
148, 152 (1st Cir. 1990) (explaining that a factfinder's choice
between two permissible views of the evidence can never be clearly

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erroneous). Nor does their postulation account for all the missing
funds. See In re Simmons, 810 F.3d at 860 (requiring a debtor to
explain "what happened to all of the assets" (quoting In re Aoki,
323 B.R. at 817)). So we need not tarry on this one.
D
The Savages' next argument fares no better and warrants
little discussion. They assert that the bankruptcy court committed
clear error by denying them a discharge despite their good faith
effort to trace how they used the Sky-Skan money. With near
vertigo-inducing variation, the Savages claim to be
unsophisticated debtors who aren't accountants but also that they
provided the bankruptcy court with "thousands of pages of
accounting history" and that their "testimony reflects that [they]
kept substantial records," just not for the unaccounted-for funds.
The inquiry is not a matter of good faith, but whether a debtor
has satisfactorily explained the loss of an asset. None of the
Savages' assertions provide an explanation at all, "much less one
that would satisfy the strictures of section 727(a)(5)." In re
Simmons, 810 F.3d at 860.
The bankruptcy court accepted the Savages' explanation
for the disposition of most of the $704,075.27 from Sky-Skan, but
that did not alleviate their obligation to explain all of it. See
id. ("The debtor's explanation must be supported by at least some
corroboration, and it must be sufficient to eliminate the need for

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any speculation as to what happened to all of the assets."
(citation modified)). In short, the bankruptcy court did not err
in finding most of the Sky-Skan funds accounted for, but not all,
and denying the Savages a discharge as a result.
E
In a final attempt to prove clear error, the Savages
argue that the bankruptcy court penalized them for "being unable
to meet their burden when Coastal refused access and knowingly
destroyed documents that likely contained evidence that would have
provided a satisfactory explanation regarding where the entirety
of the money went." In August 2021, the Chapter 7 trustee from
the Sky-Skan bankruptcy was authorized to destroy certain Sky-Skan
records and release other documents to Coastal, who was permitted
to take possession of these records if it chose to. Part of this
permission also allowed Coastal to "confidentially destroy[]"
these records after they were no longer needed for a dispute
between Coastal and the IRS. Under our spoliation doctrine,9 the
Savages now request that we infer there was a satisfactory
explanation for what happened to the Sky-Skan money in the
documents that Coastal did not independently provide to the Savages
and later destroyed.
9 See Gomez v. Stop & Shop Supermarket Co., 670 F.3d 395, 399
(1st Cir. 2012), for a detailed explanation of this doctrine as we
won't be needing it here.

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Both Coastal and the district court viewed this claim as
first raised in the Savages' post-trial motion for
reconsideration. The Savages adamantly oppose this
characterization but do little else to support their claim. The
Savages say that they first raised this issue in a motion in
limine, but they never discuss the court's denial of that motion
or why we should deem it reversible error. Furthermore, the
Savages never address the bankruptcy court's justification for
dismissing this claim in the Savages' motion for reconsideration
or the district court's reasons for affirming. A party who fails
to develop an argument as to why a particular order is erroneous
waives their ability to do so. Cioffi v. Gilbert Enter., 769 F.3d
90, 93-94 (1st Cir. 2014). We find apt reason to apply this
prophylactic rule here amidst the Savages' unsupported factual
allegations and unmentioned discovery details.
III
For the reasons outlined above, we affirm. Parties shall
bear their own costs.

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