Understand the complexities and nuances of the Bankruptcy Code to better advise clients and prepare for court.
By Daniel Gill
Damages awarded for a student’s publicly maligning her nursing school won’t be wiped out in the student’s subsequent bankruptcy case, a New Jersey bankruptcy court held in a Jan. 24 unpublished opinion ( SSS Educ., Inc. v. Fisher (In re Fisher) , 2017 BL 20151, Bankr. D.N.J., No. 16-12991-ABA, unpublished 1/24/17 ).
Theresa C. Fisher inflicted “willful and malicious injury” on Jersey College when she made “defaming statements” and harassed the school after failing a class, Judge Andrew B. Altenburg Jr. of the U.S. Bankruptcy Court for the District of New Jersey wrote. The decision held that an arbitration award of “more than $250,000" against Fisher won’t be discharged by her Chapter 7 bankruptcy case.
In Chapter 7, a debtor’s nonexempt assets are liquidated by a trustee, and the proceeds are distributed to creditors. The debtor is then granted a discharge of debts not subject to an exception. Jersey College filed suit in the bankruptcy case to have its arbitration award determined to be non-dischargeable, pursuant to Section 523(a)(6) of the Bankruptcy Code. That section provides that damages for “willful and malicious injury” are excepted from discharge in bankruptcy.
After Fisher failed her “Senior Seminar, a course necessary for graduation,” she organized demonstrations and pickets against the school and uploaded “demonstrably false statements” about the school on a number of print and social media, the court said.
For example, Fisher created a Youtube video titled “Jersey College a fraud,” where she falsely stated that the school was not accredited. The video “became the number one result when searching ‘Jersey College’ on Youtube or Google,” the court said.
The college produced evidence that Fisher’s campaign actually led to a drop in enrollment and “increased concern among current students about the school losing its accreditation,” according to evidence presented in arbitration, the court said.
The court disposed of Fisher’s defense that the First Amendment protected her conduct, because that protection of free speech doesn’t extend to “false statements of fact.”
Jersey College was represented by Gregory Mueller, Tenafly, N.J. Theresa Fisher, of Pennsauken, N.J., represented herself in the proceedings.
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To contact the editor responsible for this story: Jay Horowitz at JHorowitz@bna.com
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