BANKRUPTCY CAPERS

The Bankruptcy Code generally excepts from discharge any debt "for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny." 11 U.S.C. 523(a)(4).  That section has been construed to include any shortfall in a fiduciary's accounts.

In one case, a fiduciary was short $463,000 in his accounting.  Mr. Foster prepared a Motion for Summary Judgment, which resulted in the Bankruptcy Judge ruling that the debt could not be discharged in the Chapter 7 proceeding.

In another matter, Mr. Foster made a state court judgment the basis of another motion for summary judgment in Bankruptcy Court, which resulted in a fiduciary being saddled with the $218,000 state court judgment despite his bankruptcy.  Nothing was collected on that judgment, although a recorded judgment lien remains on the fiduciary's house. 

This website is lawyer advertising, in that it contains general information that  varies in its application to the specific facts of each case.  Nothing on this website is to be construed as legal advice or the formation of an attorney-client relationship.  E-mail or other communication sent before consultation with Attorney Foster will not be confidential.