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.
Plutocrat 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)