Commercial Law World - Issue 4, 2017 - 14

the court's equity jurisdiction. Ward v. Ward (In re
Ward), 184 B.R. 253, 256 (Bankr. D. S.C. 1995) (citing
In re Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 3940 (1989)).
If your debt was the subject of state court litigation
in which a final judgment was entered, your Section
523 adversary action may go much more quickly if the
lawsuit litigated identical factual elements as those
required for a Section 523 discharge. In Grogan v.
Garner, the United States Supreme Court held that the
bankruptcy court could give collateral estoppel effect
to those elements of the claim that are identical to the
elements required for discharge a fraud claim reduced to
a final judgment so long as they were actually litigated
and determined in the prior action. So for example, if
your state court litigation involved elements of "false
pretenses, a false representation, or actual fraud"
that you successfully reduced to judgment under a
preponderance of the evidence standard, the doctrine of
collateral estoppel would likely support a quick motion

A L
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for summary judgment. However, the related doctrine of
res judicata would not have this effect. Brown v. Felsen,
442 U.S. 127, 136 (1979) (holding that res judicata
does not apply to claims of dischargeability because
bankruptcy courts have "exclusive jurisdiction" over
claims of dischargeability.).
If your client's debtor files a bankruptcy petition, you
should discuss a Section 523 adversary proceeding to
challenge the debt's dischargeability with your client if
you have a meritorious basis. A debtor's defense of an
adversary proceeding is additional time and expense
for the debtor and its attorney that can provide leverage
to encourage the debtor to consider payment of a
settlement offer. Conversely, in many cases, the expense
of an adversary proceeding can become your client's
throwing good money after bad. Discuss the specifics
of the debt with your client to determine whether an
adversary action could lead to a cost-effective litigation
or settlement. 

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Table of Contents for the Digital Edition of Commercial Law World - Issue 4, 2017

Contents
Commercial Law World - Issue 4, 2017 - Cover1
Commercial Law World - Issue 4, 2017 - Cover2
Commercial Law World - Issue 4, 2017 - Contents
Commercial Law World - Issue 4, 2017 - 2
Commercial Law World - Issue 4, 2017 - 3
Commercial Law World - Issue 4, 2017 - 4
Commercial Law World - Issue 4, 2017 - 5
Commercial Law World - Issue 4, 2017 - 6
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Commercial Law World - Issue 4, 2017 - 12
Commercial Law World - Issue 4, 2017 - 13
Commercial Law World - Issue 4, 2017 - 14
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Commercial Law World - Issue 4, 2017 - 17
Commercial Law World - Issue 4, 2017 - 18
Commercial Law World - Issue 4, 2017 - 19
Commercial Law World - Issue 4, 2017 - 20
Commercial Law World - Issue 4, 2017 - 21
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Commercial Law World - Issue 4, 2017 - 25
Commercial Law World - Issue 4, 2017 - 26
Commercial Law World - Issue 4, 2017 - 27
Commercial Law World - Issue 4, 2017 - 28
Commercial Law World - Issue 4, 2017 - Cover3
Commercial Law World - Issue 4, 2017 - Cover4
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