Smith Drug Co. vs Beth Pharr-Luke, 259 B.R. 426 (Bankr S.D.GA 2000)
N/AOUTCOME: Rulling in favor of Plaintiff
The common law at issue in Pharr-Luke provides that “managing officers of a corporation are charged with the duty of conserving and managing the remaining assets in trust for the creditors when the co ... rporation becomes insolvent.” Id. at 430 (citing Ware v. Rankin, 97 Ga. App. 837, 838, 104 S.E.2d 555, 558 (Ga. Ct. App. 1958)). The court found that this insolvency trust created “an express fiduciary duty imposed by law” and that it “predate[d] the act giving rise to the indebtedness at issue.” Id. at 431. Thus, the trust was sufficient to create fiduciary capacity for purposes of § 523(a)(4). Id.
