Case Summary:
The Court granted in part and denied in part the defendant’s motion to dismiss the plaintiff’s adversary complaint.  The plaintiff alleged that the defendant fraudulently induced her to invest in his company and that the debt owed to her as a result was nondischargeable under 11 U.S.C. § 523(a)(2)(A), (a)(4), (a)(6), and (a)(19).  The Court denied the motion to dismiss as to the claims under §§ 523(a)(2)(A) and (a)(6) after concluding the plaintiff sufficiently alleged that the defendant made false representations to her that she relied on to her detriment.  The Court dismissed the claim under § 523(a)(4) because the plaintiff had not pleaded facts sufficient to establish that the defendant was acting as a fiduciary.  Finally, the Court denied the motion as to the claim under § 523(a)(19).  The plaintiff sufficiently alleged that the defendant violated Wisconsin state securities laws, based in part on a Wisconsin Department of Financial Institutions consent order.  The Court also concluded that the plain language of § 523(a)(19)(B) allows a bankruptcy court to enter the order or judgment required to render a debt for violation of securities laws to be nondischargeable.

Statute/Rule References:
11 U.S.C. § 523(a)(2)(A)
11 U.S.C. § 523(a)(4)
11 U.S.C. § 523(a)(6)
11 U.S.C. § 523(a)(19)

Key Terms:
Nondischargeable
Fraud