U.S. Supreme Court Agrees To Hear ‘Defalcation’ Bankruptcy Case

WASHINGTON, D.C. - (Mealey's) The U.S. Supreme Court on Oct. 29 agreed to hear a case to determine whether a defalcation was committed by a debtor who, prior to filing for bankruptcy, had been appointed the trustee of his father's life insurance trust and took out three loans from the trust...

Professor Kenneth N. Klee Previews the Supreme Court's Decision in Bullock v. BankChampaign, N.A and the Meaning of "Defalcation" in 11 U.S.C. § 523(a)(4)

Professor Kenneth Klee previews the issues that the Supreme Court will address in Bullock v. BankChampaign, N.A. The Court will settle a circuit split concerning the meaning of the word "defalcation" in Bankruptcy Code § 523(a)(4). In Bullock, the Eleventh Circuit joined the Fifth, Sixth...

U.S. Supreme Court Hears Arguments in Case of Debtor’s Alleged Defalcation

WASHINGTON, D.C.- The U.S. Supreme Court today heard oral arguments in a case involving a bank's claim that a debtor who had acted as trustee for his father's insurance trust acted recklessly and was guilty of defalcation for making loans to himself during the time he had control of the trust...

U.S. Supreme Court Remands Bankruptcy Defalcation Case, Says Higher Standard Needed

WASHINGTON, D.C. - (Mealey's) The U.S. Supreme Court on May 13 unanimously vacated and remanded a case involving a bank's claim that a debtor who had acted as trustee for his father's insurance trust was guilty of defalcation for making loans to himself during the time he had control of...

Bullock v. BankChampaign, 2013 U.S. LEXIS 3521 (May 13, 2013)

LexisNexis Core Overview: Nonprofessional trustee was improperly denied a discharge of a debt in bankruptcy based on fiduciary defalcation under 11 U.S.C.S. § 523(a)(4) [ an annotated version of this statute is available to lexis.com subscribers ] since the trustee repaid loans for the trustee's...

Supreme Court Sets Defalcation Bar at Gross Recklessness under Section 523(a)(4)

In the only bankruptcy case pending before it this term, a unanimous Supreme Court has ruled that the archaic term "defalcation" used in 11 U.S.C. Sec. 523(a)(4) requires knowledge of, or gross recklessness in respect to, the improper nature of the relevant fiduciary behavior complained...

US Supreme Court Deciphers "Defalcation" in Bullock: A Canonical Exercise in "Reading Law" (Scalia/Garner)

The US Supreme Court has long taught the importance of certain canons of interpretation unique to bankruptcy law, the more significant ones being: The Fresh-Start Policy : A primary purpose of bankruptcy is to relieve the debtor "from the weight of oppressive indebtedness and permit...

US Supreme Court's Decision in Bullock: A Significant Development in Determining "Recklessness" Under Federal Law?

Last week I published a blog post on the US Supreme Court's unanimous decision in Bullock v. BankChampaign, N.A. , No. 11-1518 (May 13, 2013) ( pdf ) [ an enhanced version of this opinion is available to lexis.com subscribers ], that focused on the Court's application of the noscitur a sociis...

Professor Kenneth N. Klee on the Supreme Court's Holding in Bullock v. BankChampaign, N.A., 569 U.S. __, 2013 U.S. LEXIS 3521 (May 13, 2013)

Professor Kenneth Klee analyzes the May 13, 2013 Supreme Court ruling in Bullock v. BankChampaign, N.A. (In re Bullock) which settled a longstanding circuit split concerning the meaning of the word "defalcation" in the Bankruptcy Code exception to discharge in § 523(a)(4) by holding...