United States Supreme Court

The term "defalcation" in the 11 U.S.C. section 532(a)(4) of the Bankruptcy Code includes a culpable state of mind requirement involving knowledge of, or gross recklessness in respect to, the improper nature of the fiduciary behavior, and thus the lower courts' holdings that petitioner-debtor's debts were not dischargeable pursuant to section 523(a)(4) because the debts fell within section 523(a)(4)'s exception "as a debt for defalcation while acting in a fiduciary capacity," under an "objective recklessness" standard, is vacated and remanded.

Appellate Information

• Decided 05/13/2013
• Published 05/13/2013

Judges

• BREYER

Court

• United States Supreme Court

Counsel