Facts

In 2009 and 2010, plaintiffs and defendant entered into a number of agreements to purchase life insurance policies on the lives of several individuals. According to plaintiffs, Klein collected proceeds from these policies without distributing a portion of the proceeds to plaintiffs, per the agreements, sold portions of the policy without plaintiffs' consent, and concealed other material information.

On Feb. 22, 2023, defendant filed for bankruptcy, with approximately $162 million in claims. Plaintiffs moved for nondischargeability of debt pursuant to 11 USC § 523(a)(2)(A) (fraud), 11 USC § 523(a)(4) (fiduciary fraud, embezzlement & larceny), & 11 USC § 523(a)(6) (conversion).

DEFENDANT'S CONTENTIONS: Klein filed an Answer after his default was taken without first moving to set aside the default, which the court disregarded.

Result

Judgment for nondischargeability of debt pursuant to 11 USC § 523(A)(2)(A), 11 USC § 523(A)(4), & 11 USC § 523(A)(6) in the amount of $21,737,740.70