New Cases For the Week of September 17, 2001 - September 21, 2001

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September 17, 2001

Case

Court

Holding

In re Chiu
(DBN Subscription Required)
9th Cir. BAP A Chapter 7 debtor who has sold his exempt homestead after his case has been closed nevertheless has standing to reopen the case and seek to avoid (under 11 USC 522(f)) a judicial lien on certain escrowed proceeds of the sale. 
In re Jacks
(DBN Subscription Required)
9th Cir BAP Under California law, a director of an insolvent corporation owes a fiduciary duty to the corporation's creditors.  This duty comprises a sufficient "express trust" for the purposes of 11 USC 523(a)(4).

Nondischargeability under 11 USC 523(a)(6) can be established by proof that the debtor intended to injure the creditor, or believed that injury was substantially certain to occur as the result of his conduct.  A property interest need not be be secured or otherwise earmarked to be the subject of a willful and malicious injury to form the basis for a claim under 11 USC 523(a)(6).  When the officers and directors of an insolvent corporation misappropriated and fraudulently transferred corporate assets while the corporation is insolvent, thus injuring a creditor's  unsecured claim against the corporation, this conduct can form the basis for a claim under 11 USC 523(a)(6). 

 
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