Violating a PACA trust does not result in ‘defalcation while acting in a fiduciary capacity’ that makes a debt nondischargeable, Bankruptcy Judge Panos says, taking sides with the Eleventh Circuit.
Differing with eight lower courts, the Fifth Circuit sided with the Fourth Circuit by holding that debts of corporate debtors in Subchapter V can be nondischargeable in nonconsensual plans.
Alleging that a debtor realized an ‘impossibly high’ rate of return in a Ponzi scheme isn’t enough to state a claim of nondischargeability for ‘actual fraud.’
