Husky Int’l Electronics v. Ritz

Husky Int’l Electronics v. Ritz (US Supreme Court 2016).  This case is about Bankruptcy Code 11 U.S.C. 523 which defines which debts are non-dischargeable in bankruptcy.  Most common examples are a debt incurred by way of fraud or false representation, fraud in a fiduciary capacity, domestic support obligations or willful or malicious injury.  The opinion focused on actual fraud under 523 (a) (2) (A).  The court held that actual fraud does not require a false representation but can include fraudulent conveyance schemes.  The case was remanded back to the bankruptcy court to determine the facts.  Some commentators have suggested that this holding will encourage more filings by creditors as it is an “easier” standard than that proposed in the dissent which would require that the debt result from the fraud at the inception of the transaction.

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