Case Summary:
A creditor sought a determination that the Debtor, the sole officer and shareholder of a restaurant, was personally liable for unpaid produce bills pursuant to the Perishable Agricultural Commodities Act ("PACA"), and that the amounts owed were nondischargeable in the Debtor’s personal bankruptcy case under 11 U.S.C. § 523(a)(4). The Debtor filed a motion to dismiss, arguing that PACA did not impose fiduciary duties for purposes of nondischargeability proceedings. The Court disagreed, finding that PACA establishes a trust on perishable commodities and sales proceeds and imposes duties on the buyers of perishable goods, including fiduciary duties within the meaning of section 523(a)(4). Having also concluded that the Debtor failed to pay the creditor for deliveries of produce, the Court found that the creditor’s complaint stated a claim for relief and denied the Debtor’s motion to dismiss.

Statute/Rule References:
11 U.S.C. § 523(a)(4) -- Nondischargeability - Fraud in Fiduciary Capacity

Key Terms:
Fiduciary Capacity