Bankruptcy: Securities Fraud – Dischargeability – Vicarious Liability

Reuter v. Cutcliff, et al. (MLW No. 61753/Case No. 10-6043 – 19 pages) (U.S. Bankruptcy Appellate Panel, Saladino, B.J.)

Where a debtor, who was the subject of a civil suit for securities fraud, objected to bankruptcy court’s orders denying confirmation of his plan and dischargeability of debts owed to the investor-plaintiffs, the bankruptcy court properly found  that the debtor was liable for statutory securities fraud under Missouri law, and the debtor conceded the validity of the claims, so the court did not need to determine whether liability had been established before determining the non-dischargeability of the debts, and the court did not err in holding that the debtor was vicariously liable for the fraud of his business associate.

Judgment is affirmed.

Reuter v. Cutcliff, et al. (MLW No. 61753/Case No. 10-6043 – 19 pages) (U.S. Bankruptcy Appellate Panel, Saladino, B.J.) Appealed from U.S. Bankruptcy Court, Western District of Missouri, Dow, J. (James F.B. Daniels, Kansas City, Missouri, for appellant) (David Gregory Brown, Columbia, for appellee).

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