Siragusa v. Collazo

Bankruptcy Ct. did not err in rejecting creditors’ claim that debtor was not entitled to discharge of debts generated when creditors loaned money to debtor upon debtor’s representations that money would be repaid once debtor sold condominium units that had been converted from apartments, even though creditors claimed that debtor made fraudulent misrepresentations regarding his intention to repay said loans and subsequently transferred units to different entities that had no legal obligation to them. While Bankruptcy Code does not discharge debts for money obtained by false premises, relevant Ill. statute of limitations for fraud claims is five years, and record showed that limitations period had expired by time creditors had filed instant adversary action. Ct., though, held out possibility that Dist. Ct. could deny discharge of debt of one creditor based on argument that debtor committed fraud when he subsequently transferred units within limitations period to other entities in effort to keep proceeds out of hands of creditor, but could only so hold if U.S. Supreme Ct. ultimately finds in pending case in that Court that there can be fraud claim without allegation that individual made overt fraudulent statement to victim.