Baird v. Matlack

Summary

In this memorandum opinion, the United States Bankruptcy Court for the Southern District of Texas determines that Christie Baird’s claim against Adam Matlack is excepted from discharge under 11 U.S.C. § 523(a)(4) because it arose from larceny. The court finds that Matlack wrongfully took 7.742 Bitcoin belonging to Baird and rejects his account that the cryptocurrency was lost through hacking or phishing. The court reserves the issue of damages for a separate evidentiary hearing.

Holdings

1. Baird proved that Matlack fraudulently and wrongfully took her Bitcoin, intended to convert it to his own use, and intended to permanently deprive her of it. The resulting claim is a debt arising from larceny and is excepted from discharge under 11 U.S.C. § 523(a)(4).
2. A creditor may establish the debtor's state of mind and wrongful appropriation through circumstantial evidence, and Baird did so here.

Questions Presented

1. Whether Baird proved by a preponderance of the evidence that Matlack fraudulently and wrongfully took her Bitcoin with intent to convert it to his own use and permanently deprive her of it, constituting larceny under 11 U.S.C. § 523(a)(4).
2. Whether circumstantial evidence may establish the debtor's identity as the taker and his intent for purposes of excepting the debt from discharge.

Disposition

other