William F. Carney v.

── William F. Carney v. ── Court: Court of Appeals for the Third Circuit Date: May 01, 2026 Category: General NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT ________________ No. 24-3196 ________________ In re: WILLIAM F. CARNEY, Appellant _____________ On Appeal from the United States District Court for the Western District of Pennsylvania (D.C. Civil No. 2:24-cv-00778) District Judge: Honorable Marilyn J. Horan ________________ Submitted Pursuant to Third Circuit L.A.R. 34.1(a) on October 28, 2025 Before: CHAGARES, Chief Judge, BOVE, and SCIRICA, Circuit Judges. (Filed: May 1, 2026) ________________ OPINION * ________________ SCIRICA, Circuit Judge The Bankruptcy Code imposes an affirmative obligation on debtors to report their assets and liabilities. Since both creditors and the Bankruptcy Court rely on this “full and * This disposition is not an opinion of the full Court and pursuant to 3d Cir. I.O.P. 5.7 does not constitute binding precedent. honest disclosure,” a debtor’s compliance is “crucial to the effective functioning of the federal bankruptcy system.” Ryan Operations G.P. v. Santiam-Midwest Lumber Co., 81 F.3d 355, 362 (3d Cir. 1996). “Given this reliance, we cannot overemphasize the debtor’s obligation to provide sufficient data to satisfy the Code standard.” Oneida Motor Freight, Inc. v. United Jersey Bank, 848 F.2d 414, 417 (3d Cir. 1988). Debtor William F. Carney failed to meet this obligation. He now seeks to benefit from that failure. While one of Carney’s previous bankruptcy proceedings was ongoing, without notifying the Bankruptcy Court or his creditors, Carney reached a settlement in the Pennsylvania Court of Common Pleas involving claims and assets that were part of his bankruptcy estate. Under the Bankruptcy Code, Carney was not permitted to reach that agreement without approval of the Bankruptcy Court. But that prior proceeding was dismissed and closed without the court ever approving—or, indeed, learning of—the settlement. Several months later, Carney filed the instant bankruptcy. Upon learning of Carney’s agreement, and following the motion of his Chapter 7 Trustee, the court approved the settlement following the procedure required by Federal Rule of Bankruptcy Procedure 9019(a). The District Court affirmed. Carney now contends that the Bankruptcy Court abused its discretion by adopting his own settlement. We reject that contention and will affirm the District Court’s judgment. I. Though this appeal arises from Appellant William F. Carney’s fifth bankruptcy proceeding, it involves conduct that occurred during two prior interconnected cases— 2 Carney’s fourth federal bankruptcy and the simultaneous Pennsylvania probate of his mother Mary Carney’s estate. We must begin with those prior proceedings. On May 1, 2022, Carney filed his fourth bankruptcy case. While Carney’s Chapter 13 bankruptcy was pending, on June 5, 2022, Carney’s mother Mary Carney passed away. Mary’s last will and testament designated Appellee Janice Lynn Allan— Mary’s daughter and Carney’s sister—executrix of the estate, and the Pennsylvania Court of Common Pleas duly granted Letters Testamentary to Allan. Under the terms of the probated will, Carney, Allan, and their brother John A. Carney III were devised the remainder of Mary’s estate in equa