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whether the debtor should be denied a discharge under S 727. Debtor had obtained confirmation of a Chapter 13 plan, but debtor failed to fulfill his obligation under the plan to surrender collateral to the creditor, and debtor had abandoned the plan by converting the case to one under Chapter 7. Additionally, debtor acknowledged the debt to the creditor in his Chapter 7 schedules. Accordingly, the creditor was not bound by the terms of the plan and had standing to file an adversary complaint objecting to discharge and dischargeability. (2) Even though debtor gave inconsistent testimony about who owned property that constituted a portion of the creditor's purported collateral, the bankruptcy court did not clearly err in holding that the debtor did not intend to deceive the creditor. Accordingly, the bankruptcy court did not err in denying the objection to discharge of the debt to the creditor under S 523(a)(2). (3) Bankruptcy court erred in enjoining creditor, based on alleged abusive practices, from filing a complaint under S 523 or S 727 in any Chapter 7 case without prior leave of court. The only alleged abuse reflected in the record was that the creditor did not have standing to file the complaint in this case, but the appellate court found that the bankruptcy court reaching this conclusion in error. As a result, there was no basis to enjoin the creditor from filing adversary complaints.)
Fischer Inv. Capital, Inc. v. Cohen (In re Cohen), 507 F.3d 610 (7th Cir. Nov. 9, 2007) (Bankruptcy court correctly granted summary judgment to debtor in adversary proceeding to determine dischargeability under S 523(a)(2)(B). Although the debt was obtained through a list of accounts receivable, and there was testimony that some of the accounts were "hopeful," the record did not reflect that the hopeful items were not real receivables or were never collected. Additionally, although it was suggested that the debtor had the intent to deceive, the list of accounts receivable was actually prepared and submitted by debtor's business partner, so there was no basis for attributing any inaccuracies to the debtor.)
Nunnery v. Rountree (In re Rountree), 478 F.3d 215 (4th Cir. Feb. 27, 2007) (Debtor's obligation to creditor did not meet the requirements of S 523(a)(2)(A) and, thus, was dischargeable. That section only applies when money, property, services or credit is "obtained by" false pretenses, false representations or fraud. Debtor never received anything by defrauding creditor.)
Evans v. Ottimo, 469 F.3d 278 (2d Cir. Nov. 20, 2006) (Pre-petition state court default judgment that expressly found debtor had engaged in fraud bars relitigation in bankruptcy court of the fraudulent character of the debt.)
48. 523(a)(4) Dischargeability -- Fiduciary
