Courts split on Chapter 7 discharge for business partners

Trial Notebook

By Steven P. Garmisa

Hoey & Farina

Posted February 1, 2022 12:05 PM

M. Dustin Long alleged his partners — Dolores, Joseph and Lester Piercy — failed to hand over his full share of profits. The dispute was based on a disagreement about the terms of their deal. A chancery court judge in Tennessee ruled for Long, awarding $151,670. The Piercys filed for bankruptcy under Chapter 7, and Long countered with adversary complaints alleging the debt was nondischargeable, under 11 U.S.C. Sec. 523(a)(4), because it was based on a defalcation by the Piercys “while acting in a fiduciary capacity.” The …

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