Take-away — fraudulently obtained debt cannot be discharged with bankruptcy.
Kate and David bought a house in San Francisco intending to remodel it. The house was later sold for $2m to a developer, Barkley. Barkley sued for misrepresentation of the house’s condition and was awarded $200,000. Kate and David tried to avoid payment through bankruptcy. Barkley sued again.
This all passed in 2008. Today the debt is closer to $2M and Kate claims that she shouldn’t be held responsible and that her ex-boyfriend was solely responsible for the incomplete repairs. Kate also argued that the precedent 1885 case had a grammatical error that corrected, would give her a win.
Apparently, the December 20-minute audio of oral arguments is worth hearing. Kate lost 0-9. Go to audio>>>