Sauer Inc. v. Lawson (In re Lawson)

Citation:
Sauer Inc. v. Lawson (In re Lawson), No. 14-2058 (1st Cir. July 1, 2015)
Tag(s):
Ruling:
The First Circuit Court of Appeals VACATED the bankruptcy court's order dismissing the adversary proceeding and REMANDED for further proceedings consistent with the opinion. The First Circuit Court of Appeals held that debt that is not dischargeable in a chapter 13 bankruptcy as debt for money or property "obtained by . . . actual fraud" includes debts incurred as a result of knowingly accepting a fraudulent conveyance that the transferee knew was intended to hinder the transferor's creditors.
Procedural context:
Sauer Inc. appealed the bankruptcy court's granting of the Debtor's motion to dismiss relating to Sauer Inc.'s adversary proceeding objecting to the discharge of a debt owed by the Debtor.
Facts:
Sauer Inc. filed an adversary proceeding objecting to the discharge of a debt owed by the Debtor that she allegedly obtained as part of a fraudulent schme to prevent Sauer Inc. from collecting a previous judgment from the Debtor's father. The bankruptcy court dismissed for failure to state a claim on the ground that the debt for value "obtained by . . . actual fraud" under section 523(a)(2)(A) is limited to debts for value obtained from fraudulent misrepresentations.
Judge(s):
Lynch, Thompson, Kayatta

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