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In Re: Jay Berman v. Jay Berman

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ARGUED OCTOBER 22, 2010-

Before KANNE, TINDER, and HAMILTON, Circuit Judges.

The bankruptcy court held that a creditor failed to prove that a debt owed to it was non-dischargeable under 11 U.S.C. § 523(a)(4), which provides that a debt will not be discharged in bankruptcy where that debtor has committed “fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny.” Concluding that the creditor had not established that the debtor acted in any fiduciary capacity toward the creditor, the court entered judgment for the debtor. The district court affirmed the finding that the debt was dischargeable, as do we. We agree with our colleagues on the bankruptcy court and district court that the creditor failed to show that the debtor owed the creditor a fiduciary duty.

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