23 A 00334, 23 B 05875
Plaintiff filed a complaint objecting to Debtors’ discharge under 11 U.S.C. § 523(a)(2). The complaint did not specify whether Plaintiff is proceeding under section 523(a)(2)(A), (B), or both. Plaintiff alleges Awad Odeh’s brother solicited investments for his precious metals business, Plaintiff subsequently invested in 2019, and the business later defaulted on the investment agreements. Plaintiff further alleges that to induce him to forbear on enforcing his collection rights against the brother and his company, Debtors executed a promissory note to delay collections by two weeks. Plaintiff alleges Debtors’ statements were misrepresentations, that Debtors never intended to honor the promissory note, and were instead trying to prop up a fraudulent Ponzi scheme. In his motion to dismiss, Debtors argue Plaintiff’s claim is actionable only under section 523(a)(2)(B) because Plaintiff’s allegations revolve around misrepresentations about an insider’s financial condition. Held: While the complaint may contain allegations that respect a financial condition, it also contains other allegations that state a claim under § 523(a)(2)(A) against Defendant Awad Odeh by putting Debtor on notice of Plaintiff’s claims. Plaintiff failed to state a claim against Defendant Salameh. The court denied the motion to dismiss as to Defendant Odeh and granted the motion as to Defendant Salameh.