Casino “investment”

March 20, 2012

  • 51 Bankruptcy
  • 51X Discharge
  • 51X(C) Debts and Liabilities Discharged>
  • 51X(C)5 Torts and Crimes
  • 51k3376 Fraud or Defalcation in Fiduciary Capacity
  • 51k3376(2) Fiduciaries and Fiduciary Capacity
  • 51k3376(3) k. In General.

51 BankruptcyPlutocrat who puts an investment account of $500,000 at the disposal of a recent high-school graduate for the latter’s discretionary financial management may be acting foolishly, but has created a fiduciary relation, even if not a formal trust, and if the manager decides to “invest” the account in No. 28 on a roulette wheel then the discharge exception for fiduciary fraud or defalcation will prevent discharge of the debt.
In re McGee, 353 F.3d 537 (7th Cir. 2003)