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“Section 523(a)(19) Conflicts with Two Circuit Interpretations”
American Bankruptcy Institute Journal
July 2017

HesterKathryn H. Hester and Jeffrey R. Barber, both in the Business & Commercial Litigation Practice Group in the Jackson office, co-authored an article that was published in the July edition of the American Bankruptcy Institute Journal. The article “Section 523(a)(19) Conflicts with Two Circuit Interpretations,” stems from a decision issued by the U.S. Eleventh Circuit Court of Appeals on February 15, 2017, in a case argued by Katie Hester that established new precedent in the 11th Circuit on a Bankruptcy Code section related to dischargeability of debts for securities laws violations.  The Court interpreted section 523(a)(19)(A) to preclude discharge of a debt regardless of whether the debtor violated securities laws as long as the securities violation caused the debt. The decision conflicts with decisions of both the Ninth and Tenth Circuits which arguably require that the debtor himself be found to have violated the securities laws. To view the article click here.