Court: Boyd debt cannot be discharged in bankruptcy

DENVER — A U.S. Bankruptcy Court judge in Denver has determined that Berthoud resident Christopher Boyd cannot escape paying a judgment against him by discharging it in bankruptcy court.

Instead, the judge said, the creditor in the case is entitled to the repayment of $337,306.85 it is owed, plus 8% interest per year beginning in 2020, because fraudulent actions of Boyd make the debt nondischargeable in bankruptcy.

The case originated years ago when Crawford County farmer Adam A. Desmond and DD Needle Rock Farms LLC worked a deal with Christopher Boyd and his father, Thomas Alan Boyd, to process Desmond’s hemp crop. 

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Thomas Alan Boyd of Longmont was convicted years earlier in the failure of Boulder’s Best Bank; he spent time in prison and was obligated to repay the Federal Deposit Insurance Corp. in that situation.

In the hemp case, the Boyds took Needle Rock’s crop — 4,415 pounds — for processing at Christopher Boyd’s Berthoud company, Foothills Ventures LLC, into CBD oil with the intent of sharing the processed oil 50/50. But the crop disappeared. And it was later determined that the Boyds at the time had neither the ability nor the license to process the crop.

The Boyds were sued in Denver District Court and lost in January 2020. They also lost on appeal Sept. 9, 2021, with the judges in that case determining that Thomas Alan Boyd was liable for securities fraud and a scheme to defraud. Christopher Boyd and other defendants were judged liable for false representation, nondisclosure, concealment and negligent misrepresentation. 

The case was brought by Hemp Recovery Co. LLC, which was the assignee of the claims belonging to Desmond and Needle Rock Farms. 

The court ruled that the two Boyds were jointly and severally responsible for $337,306 in one part of the case, and Thomas Alan Boyd was responsible for $606,714 in another part of the case.

Hemp Recovery has been trying to collect since that time. Christopher Boyd sought bankruptcy court protection with a Chapter 13 case filed July 8, 2022.

Hemp Recovery argued that the district court and appeals court decisions clearly established fraud, misrepresentation and other factors that would prevent discharge in bankruptcy. It filed for a summary judgment based on the facts.

Boyd’s attorney, Stephen Berken of the Berken Cloyes PC law firm in Denver, argued that while the previous court cases may be clear with regard to Christopher Boyd’s father, they were not as clear as they apply to the son.

“There was little evidence that Christopher Boyd was guilty of fraud, other than the conclusory statement from Judge (Morris) Hoffman, and reference to a ‘hemp bucket.’ Christopher Boyd’s single biggest mistake was not conducting himself in a less than honorable manner. It was getting into business with his father,” Berken wrote in an answer to Hemp Recovery’s motion for a summary judgment.

Bankruptcy Judge Thomas McNamara, however, wrote in his decision that bankruptcy is meant as a “temporary haven for honest but unfortunate debtors. … However not all debtors are entitled to a discharge,” he wrote, noting that bankruptcy law has long established that liabilities cannot be discharged if incurred by fraud. 

“The debtor’s arguments … are unavailing,” he concluded. “A discharge … does not discharge an individual debtor from any debt for money, property, services … to the extent obtained by false pretenses, a false representation or actual fraud,” the judge said, quoting Congress.

Boyd’s attorney Stephen Berken, when contacted by BizWest today, said only that, “We’re looking at doing an appeal.”

Hemp Recovery’s attorney, Michael Lamb of the Buechler Law Office LLC in Denver, said his client was pleased with the outcome. “This is fundamentally about the recovery of a hemp crop. (The client) wants to get back what was taken from him,” Lamb said.

Lamb has not been involved with the collection of the judgment from the elder Boyd but said it was his understanding that it also has not been collected.

The bankruptcy case, filed in U.S. Bankruptcy Court, District of Colorado, is 22-12455.