In re Kapetanakis
N/AOUTCOME: Judgment declaring debt nondischargable
Kapetanakis forged the signatures of three of his relatives on an indemnity agreement issued in favor of First National. But for the delivery of the Indemnity Agreement, First National would not have ... issued surety bonds on behalf of Quality Woodwork Interiors, Inc., a company owned by Kapetanakis's family. Eventually, First National suffered losses exceeding $3 million as a result of issuing bonds to Quality Woodwork. First National sued Kapetanakis and the relatives (Quality Woodwork had already filed for bankruptcy protection) and obtained a Consent Judgment against Kapetanakis after his forgery admission led to the dismissal of his relatives. Thereafter, Kapetanakis himself filed for bankruptcy protection. Following a four-day bench trial, the Bankruptcy Court found that First National proved that Kapetanakis committed actual fraud and ordered that the $3,050,000 judgment be exempted from discharge.
