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Breach of Duty Judgment Not Dischargeable in Bankruptcy

Breach of Duty Judgment Not Dischargeable in Bankruptcy

Breach of Duty Judgment Not Dischargeable in Bankruptcy

Fifth Circuit Court of Appeals says claim stems from “fraud or defalcation while acting in fiduciary capacity”
The Fifth Circuit Court of Appeals has ruled that a homeowners’ association judgment for more than $30,000 against a former president for breach of fiduciary duty while in office is not dischargeable in bankruptcy. ( Whitaker v. Moroney Farms Homeowners’ Association , Fifth Cir., No. 15-40926, 3/18/16. ) The association had sued its former president for knowingly spending association funds to defend against a member’s proper request to see corporate documents, and separately for obtaining personal benefit from a contractor working for the association and obtaining reimbursement from the association for personal expenses. The case was litigated in state court, which issued a full opinion and...

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