Phi Air Medical, L.L.C. v. Holskey (In re Holskey)

(Bankr. W.D. Ky. Feb. 16, 2016)

The bankruptcy court finds the debt non-dischargeable under § 523(a)(4) and (6). The debtor’s minor son was transported by helicopter to a hospital after an injury. The transport company billed the debtor’s insurance company, and the insurance company sent the reimbursement check to the debtor for transfer to the transport company. The debtor used the funds for other purposes. The court finds the debtor’s explanations inconsistent and holds that the facts support a finding that the debt is based on embezzlement and/or larceny and that the debtor caused a willful and malicious injury to the creditor. Opinion below.

2016-02-16 – In re holskey

Author: Matt Lindblom

Cornerstone Industries Corp. v. Kaufman (In re Kaufman)

(Bankr. W.D. Ky. Aug. 6, 2015)

The bankruptcy court enters summary judgment in favor of the plaintiff, holding a $1.8 million claim arising from a state court judgment non-dischargeable. The state court judgment has preclusive effect, and the jury’s findings establish the requisite elements under § 523(a)(2) and (a)(6). The court discusses the applicability of § 523(a)(4) but because the jury may not have defined the term “fiduciary” the same as the bankruptcy code, the court states it is not convinced the plaintiff is entitled to summary judgment under that particular section. Opinion below.

2015-08-06 – cornerstone industries v kaufman

Author: Matt Lindblom

Stoughton Lumber Company v. Sveum

(7th Cir. June 4, 2015)

The Seventh Circuit affirms the bankruptcy court’s order denying discharge of a debt under 11 U.S.C. § 523(a)(4). Under Wisconsin law, the debtor had committed “theft by contractor” when he paid other creditors out of funds held in trust for the creditor. The creditor had sold hundreds of thousands of dollars’ worth of building materials to the debtor’s construction company. The court affirms, finding the evidence was sufficient to establish the requisite intent. Opinion below.

2015-06-04 – stoughton lumber co v sveum

Author: Matt Lindblom

Consolidated Brokers Corporation, LLC v. Buchanan (In re Buchanan)

(Bankr. S.D. Ind. Mar. 2, 2015)

The bankruptcy court enters a nondischargeability judgment in favor of the creditor. The court first holds that a prior state court judgment does not have preclusive effect as to nondischargeability under § 523(a)(4) and (6), in part because it was entered as a discovery sanction rather than on the merits. The court ultimately holds that debts arising from converted checks and larceny committed with respect to a loan check are nondischargeable, while other debts were dischargeable. Attorney fees arising out of the debtor’s embezzlement and larceny were also nondischargeable. Opinion below.

2015-03-02 – consolidated brokers v buchanan

Author: Matt Lindblom

Go Wireless, Inc. v. Lehrmitt (In re Lehrmitt)

(Bankr. W.D. Ky. Jan. 27, 2015)

The bankruptcy court enters summary judgment in favor of the creditor, holding the debt owed to it is nondischargeable under § 523(a)(2), (4), and (6). The creditor had obtained a default judgment against the debtors in California state court, which judgment recited that the debtors had obtained funds from the creditor by fraud. The Full Faith and Credit Statute, 28 U.S.C. § 1738, as interpreted by the Sixth Circuit Court of Appeals precludes the debtors from defending against the findings in the state court judgment. Section 105 does not give the bankruptcy court authority to modify the otherwise non-dischargeable debt. Opinion below.

2015-01-27 – go wireless v lehrmitt

Author: Matt Lindblom