QUESTION

Bankruptcy Statues applicable to Corporate Debtors

Asked on Mar 30th, 2013 on Bankruptcy - Kansas
More details to this question:
1. Does the exception in 11 U.S.C § 523(a)(6): "¿willful and malicious injury by the debtor¿" applicable to corporate debtors? 2. I came across the statement,"Congress clearly did not intend the term "corporate debtor" to be used interchangeably with the term "individual debtor," as such a construction would "render meaningless employment by Congress of the term 'individual'." I have found several cases using this to argue their case but have found none so far that argue against it, when presented. Any ideas?
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1 ANSWER

Bankruptcy Attorney serving Burbank, CA
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That's a great question.  First, this would only apply in a Chapter 11 bankruptcy context, because corporations do not receive discharges in Chapter 7 cases. I have not researched the issue (and would need to in order to give you a complete answer) but I don't see anything that would prevent a creditor from using 523(a)(6) (or any of the other exceptions to discharge set forth in 11 U.S.C. 523 for that matter) against a corporate debtor, assuming they had evidence to prove such a claim. One hurdle I see are establishing whether the actions of the individuals of the corporation who allegedly committed the willful and malicious injury are imputed to the corporation itself.  In other words, the act must have been taken on behalf of the corporation. Mark Markus has been practicing exclusively bankruptcy law in California since 1991.  He is a Certified Specialist in Bankruptcy Law by the State Bar of California Board of Legal Specialization,  AV-Rated by martindale.com, and A+ rated by the Better Business Bureau.    
Answered on Mar 30th, 2013 at 8:53 PM

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