An important appellate decision concerning Bankruptcy Code §523(a)(2)(A) is Lariat Companies v. Wigley (In re Wigley), 15 F.4th 1208 (8th Cir. 2021). There, the U.S. Court of Appeals for the Eighth Circuit held that the claim against the recipient of intentional fraudulent conveyances was non-dischargeable under Bankruptcy Code §523(a)(2)(A). Moreover, the court held that although the claim was subject to reduction under Bankruptcy Code §502(b)(6), the landlord cap, the entire fraudulent conveyance claim would be held non-dischargeable.
Factual Background
In 2008 Lariat Companies entered into a lease with Baja Sol Cantina EP. Michael Wigley, the debtor’s husband, and the debtor executed personal guarantees that guaranteed Baja Sol’s obligations to Lariat. In 2010, Baja Sol was evicted for non-payment of rent. Thereafter, Lariat commenced suit in state court to recover past due and future rent against Baja Sol and Mr. Wigley. The state court entered summary judgment in favor of Lariat, and entered judgment in excess of $2,000,000.
