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May 13, 2013
LexisNexis Litigation Blog
LexisNexis Litigation Blog reported on United States Supreme Court decision regarding the definition of ‘defalcation’ under the Bankruptcy code in the case of Bullock v. BankChampaign. Sutherland Partner Tom Byrne represented Randy Curtis Bullock, the petitioner, and argued orally in front of the High Court.
The court sided with Byrne in a 9-0 decision, despite a circuit split with the majority of circuit courts reaching the opposite decision, holding that to prove “defalcation” a creditor must demonstrate that the debtor acted with a culpable state of mind involving knowledge of, or gross recklessness with respect to, the improper nature of the fiduciary behavior.