JME Represents Debtors in a Ruling Receiving National Attention

Jennis Morse Etlinger represents the debtors in lead case number 3:22-bk-01326-BAJ where one of the creditors filed a nondischargeability complaint. The debtors, along with non-debtor defendants, moved to dismiss among other grounds that the exceptions to discharge under Section 523(a) apply to individuals only. Or put another way, they do not apply to entities and therefore the complaint should be dismissed as to those entities for failure to state a cause of action. The debtors relied on caselaw from the D. Idaho, S.D. N.Y., E.D. Mich. and W.D. Tex. which all supported the debtor’s positions. The creditor relied on a Fourth Circuit opinion finding to the contrary. Although Judge Burgess states that the Fourth Circuit’s opinion was “well written” he ultimately disagreed with the conclusion and ruled in favor of the debtors. A copy of the opinion can be found here . And, the case was featured in the April 20, 2023 edition of Rochelle’s Daily Wire titled “Another Court Holds that Debts of Corporate Sub V Debtors Can’t Be Nondischargeable.”