In re Tucker (06-50092, Adv. No. 06-05107)

Plaintiff's PACA claim was nondischargeable due to defalcation by the debtor. Defalcation requires fiduciary capacity, which PACA creates by providing for an identifiable res, specifying fiduciary duties, and arising prior to and without relation to the wrongdoing creating the debt. In addition, defalcation requires some knowing wrongful conduct by the fiduciary. Here, the debtor diverted PACA trust funds to pay non-PACA debts.

Tuesday, April 10, 2007