Litigation Department Co-Chair Andrew Schriever recently obtained a judgment for $3.48 million for fraudulent inducement of a loan, despite the defendant’s attempt to dismiss the claim because of an earlier bankruptcy. While the client’s fraud claim against the defendant existed, the defendant declared bankruptcy and obtained an order discharging his debts. He then tried to argue that the fraud claim should be dismissed on that basis. However, Mr. Schriever was able to obtain an order from the bankruptcy court finding that when a fraud claim existed but could not be reasonably discovered at the time of a bankruptcy, the fraud claim can survive even after the bankruptcy is closed. This paved the way for the case to go forward to obtain the judgment for the client, which now cannot be avoided by the defendant attempting to go back into bankruptcy.
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