A creditor lost a dischargeability suit by failing to call the right witnesses to prove that a lawyer’s trust account was used to hide assets.
Even though the debtor defaulted, Judge Christopher Klein held a trial and ruled that the lender had not relied on a false loan application.
A PACA trust lacks the hallmarks of a trust, so a failure to pay a produce supplier doesn’t give rise to a nondischargeable debt for defalcation while acting in a fiduciary capacity, Judge Goldgar says.