Former tax law attorney J. Douglass Jennings — now officially disbarred, according to State Bar records — cannot discharge a debt that he incurred in bankruptcy, the United States Court of Appeals, Ninth District, ruled this month (December 2nd).
The bankruptcy court had said he couldn't ditch a debt because it was incurred "in fraud or defalcation while acting in a fiduciary capacity." Jennings appealed and the Ninth District slapped him down.
The bankruptcy court had also refused to discharge a debt by Jennings's wife, his partner in business, because it had involved "embezzlement or larceny" and "willful and malicious injury" to another party. Although she has been a longtime real estate professional, she claimed she "did not know what she was signing and signed forms merely because Mr. Jennings told her to," according to the appellate panel.
The appellate court affirmed the bankruptcy court's decision on Mr. Jennings, but reversed the non-dischargeability of Mrs. Jennings's debt, saying her plea of being an ingenue "created a genuine issue of material fact."