Lefkovitz & Lefkovitz
Nashville Office 615-686-2279 Cookeville Office 931-400-2218
Serving all of Middle Tennessee's Bankruptcy Needs

Supreme Court overturns bankruptcy court ruling

Tennessee businessmen know that a company may declare bankruptcy if it continues to experience losses and take on debt. The Supreme Court recently ruled that a fraud may lead to a dismissal of discharge of personal debt, even when it involves asset transfers that don't create a false representation to a creditor.

Husky International Electronics, Inc. took its case all the way to the Supreme Court after Chrysalis Manufacturing Corp. failed to pay for goods and services purchased from Husky International Electronics. The director of Chrysalis, Daniel Ritz, transferred substantial funds from Chrysalis and distributed these funds to other entities he controlled. Husky then sued Ritz for the funds owed to the company. Soon after, Ritz filed for Chapter 7 bankruptcy for the Southern District of Texas, and the debts were discharged.

Husky could not prove the fact that Ritz has transferred funds from Chrysalis in order to declare bankruptcy and avoid debt. Under Texas law, there was no proof that Ritz had made the transfers to intentionally harm Husky. Husky then filed for a petition with the high court.

The Supreme Court overturned the ruling from the Texas court, therefore setting a precedent that fraud does not have to include an intentional misrepresentation directly to a creditor for that fraud to lead to dismissal of a case.

When filing for Chapter 7 bankruptcy, it is important to disclose all pertinent information to an experienced attorney. If funds are misrepresented, the trustee may refer his or her findings to prosecutors then pursue a criminal case against the debtor. Persons considering Chapter 7 bankruptcy may wish to consult an attorney about their case.

No Comments

Leave a comment
Comment Information

We Look At Your Case From Every Angle To Find The Solution That Is Right For You

Bankruptcy help for everyone, from the most simple to the most complex cases.

Call Us Now To Schedule A Free Initial Consultation

Contact our Nashville office at 615-686-2279 or our Cookeville office at 931-400-2218. You can also reach us via email to set up a time to talk to us about your debts.

Get Legal Help Now

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Nashville Office
618 Church Street, Suite 410
Nashville, TN 37219

Phone: 615-686-2279
Fax: 615-255-4516
Nashville Law Office Map

Cookeville Office
312 East Broad Street, Suite A
Cookeville, TN 38501

Phone: 931-400-2218
Fax: 931-526-6244
Cookeville Law Office Map

Back To Top