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LVR Carpet Center Inc. v. Coley (In re Coley)

LVR Carpet Center Inc. v. Coley (In re Coley)

Ruling
Detbors' failure to use fire insurance proceeds to pay repairing contractor was fiduciary defalcation rendering debt nondischargeable.
Procedural posture

Plaintiff contractor brought an adversary proceeding against defendant bankruptcy debtor, seeking a determination that a debt to the contractor was not dischargeable under 11 U.S.C. § 523(a)(4) based on the debtor's fiduciary defalcation in misapplying construction funds. The bankruptcy court conducted a trial concerning the amount of funds misapplied by the debtor.

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opinion summary, case decided on November 28, 2006 , LexisNexis #0107-050