Melanie Damian, as Receiver of Todays Growth Consu v. Courtright et al

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
In re:
WILLIAM CHARLES COURTRIGHT,
Debtor.
Case No. 25-56515-JRS
CHAPTER 7
MELANIE E. DAMIAN, as Receiver
of Todays Growth Consultant Inc.
Plaintiff, 	Adv. Proc. No. 25-05170-JRS
v.
WILLIAM CHARLES COURTRIGHT,
Defendant.
ORDER DENYING PLAINTIFF’S MOTION FOR PARTIAL SUMMARY
JUDGMENT
The issue before the Court is the application of the U.S. Supreme Court’s
decision in Bartenwerfer v. Buckley, 598 U.S. 69 (2023) and the doctrine of collateral
estoppel to the Plaintiff’s claim under 11 U.S.C. § 523(a)(2)(A) for actual fraud based
on a federal district court judgment against the Debtor. 	This judgement was based
on the Illinois Uniform Fraudulent Transfer Act and ordered the recovery of sales
_______________________________________________________________
IT IS ORDERED as set forth below:
_____________________________________
James R. Sacca
U.S. Bankruptcy Court Judge
Date: August 27, 2026
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commissions paid to the Debtor by a company operating a Ponzi scheme which the
district court found the Debtor did not receive in good faith ignorance of the Ponzi
scheme.
The issue arises in the Motion for Partial Summary Judgment (the “Motion”)
filed by Melanie E. Damian, as Receiver of Todays Growth Consultant Inc. (the
“Receiver”), [Adv. Proc. Dkt. Nos. 18 & 19], on the Receiver’s claim for actual fraud
under § 523(a)(2)(A). 	[Compl., Adv. Proc. Dkt. No. 1; Mot. Summ. J. 1-2, Adv. Proc.
Dkt. No. 19]. 	Specifically, the Receiver argues the doctrine of collateral estoppel
applies to findings of fact and conclusions of law and a judgment entered against Mr.
Courtright and his company Courtright Consulting by United States District Court
Judge Thomas Durkin of the Northern District of Illinois. [Mot. Summ. J., Adv. Proc.
Dkt. No. 19].
The Court has considered the Response to the Motion filed by William
Courtright (“Mr. Courtright”). 	[Adv. Proc. Dkt. Nos. 20 & 21]. 	The Court has also
considered the Reply, [Adv. Proc. Dkt. No. 23], filed by the Receiver and the Surreply
[sic], [Adv. Proc. Dkt. No. 24], filed by Mr. Courtright. For the reasons stated herein,
the Court DENIES the Motion.
I. 	Facts
The parties focus on the findings of fact and conclusions of law, the supplement
to the findings of fact and conclusions of law, and judgment entered by Judge Durkin
of the Northern District of Illinois. [Pl.’s Statement of Material Facts (“Pl.’s SOMF”)
¶¶ 5-7, 10, Adv. Proc. Dkt. No. 18; Def.’s Statement of Material Facts (“Def.’s SOMF”)
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¶¶ 7-9, 11, Adv. Proc. Dkt. No. 21]. 	However, the parties disagree as to what the
findings of fact and conclusions of law and judgment establish and their applicability
to this proceeding.
Judge Durkin entered his findings of fact and conclusions of law on October 2,
2024. 	[Pl.’s SOMF, Ex. A, which attached Judge Durkin’s findings of fact and
conclusions of law as Ex. B]. 	Judge Durkin noted in his findings of fact and
conclusions 	of 	law 	that 	Kenneth 	Courtright—Mr. 	Courtright’s 	brother—was
convicted of wire fraud and bank fraud in connection with his operation of his
company 	Todays 	Growth 	Consultant 	Inc. 	(“TGC”) 	and 	that 	the 	Receiver 	was
appointed as the receiver for TGC in an SEC enforcement action against TGC. 	[Id.
at 1]. 	Judge Durkin also noted that the Receiver filed the case against Mr.
Courtright, a former sales broker for TGC, and Mr. Courtright’s company Courtright
Consulting to recoup sales commissions TGC paid to Mr. Courtright and Courtright
Consulting (collectively the “Defendants”). 	[Id.]. 	The Receiver alleged “these
payments 	were 	fraudulent 	conveyances 	in 	violation 	of 	the 	Illinois 	Uniform
Fraudulent Transfer Act, 740 ILCS § 160/5(a)(1).” [Id.]. There was a bench trial on
the merits, and Judge Durkin’s findings were by clear and convincing evidence. [Id.
at 1-2].
Judge Durkin framed the issue before the court as follows:
If Kenneth Courtright had actual intent to defraud TGC’s
creditors, then TGC’s payments to William Courtright and
Courtright Consulting were “fraudulent” under the terms
of 	the 	statute 	and 	can 	be 	recouped 	by 	the 	Receiver.
However, a “transfer or obligation is not voidable . . .
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against 	a 	person 	who 	took 	in 	good 	faith 	and 	for 	a
reasonably equivalent value[.]”
[Id. at 5-6].
Concerning Kenneth Courtright and TGC, Judge Durkin found that
Kenneth Courtright had actual intent to defraud TGC’s
creditors because clear and convincing evidence shows that
TGC was a Ponzi scheme. . . . [T]here is no dispute that
TGC was never able to satisfy the financial obligations it
made to investors and was instead using new investor
funds to pay obligations to earlier investors. This clearly
demonstrates that TGC was a Ponzi scheme and permits
the inference that TGC and Kenneth Courtright had actual
intent 	to 	defraud 	TGC’s 	creditors 	when 	it 	made 	the
payments to Defendants.
[Id. at 9].
Regarding TGC’s payments of sales commissions to the Defendants, Judge
Durkin analyzed 740 ILCS § 160/9 which provides that a “transfer or obligation is not
voidable . . . against a person who took in good faith and for a reasonably equivalent
value.” 	[Id. at 10]. 	Judge 	Durkin 	found that 	the Defendants 	had provided
“reasonably equivalent value” for the sales commissions they received because
“[w]hether or not William Courtright knew TGC was a Ponzi scheme, it is undisputed
that he and his company generated more than $60 million in contracts for TGC.” [Id.
at 15].
However, Judge Durkin found that Mr. Courtright did not take some of the
sales commissions from TGC in good faith because there came a time when he was
on inquiry notice of TGC’s potential fraud:
As of November 3, 2017, when he received the email about
95% of TGC’s websites being ignored, Bill was on inquiry
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notice 	regarding 	TGC’s 	potential 	fraud. 	There 	is 	no
evidence in the record, however, that Bill took action to
investigate TGC’s finances and business stability or sought
to learn information that would support the promises he
was making to TGC’s investors. For that reason, the Court
finds that all payments TGC made to Defendants after
November 3, 2017, were taken by Defendants without good
faith ignorance of TGC’s fraud. As such, the transfers were
fraudulent in violation of the Illinois Uniform Fraudulent
Transfer Act and may be recouped by the Receiver.
[Id. at 19].
Judge Durkin subsequently entered a supplemental order for his findings of
fact and conclusions of law on March 10, 2025. 	[Pl.’s SOMF, Ex. A, which attached
Judge Durkin’s findings of fact and conclusions of law supplemental order as Ex. C].
Judge Durkin noted that the court had found that “‘all payments TGC made to
Defendants after November 3, 2017, were taken by Defendants without good faith
ignorance of TGC’s fraud,’ and as such ‘the transfers were fraudulent in violation of
the Illinois Uniform Fraudulent Transfer Act and may be recouped by the Receiver.’”
[Id. at 1]. Judge Durkin concluded that the Receiver could recoup $1,346,268.05 from
the Defendants. 	[Id. at 3]. 	A judgment was entered the same day against the
Defendants for that amount. [Pl.’s SOMF, Ex. A, which attached the judgment as Ex.
D]. Mr. Courtright did not appeal the judgment. [Pl.’s SOMF ¶ 9].1
1 BLR 7056(a)(2) states in pertinent part:
[t]he respondent to a motion for summary judgment must attach to the
response a separate and concise statement of material facts, numbered
separately, as to which the respondent contends a genuine issue exists
to be tried. Response should be made to each of the movant’s numbered
material facts. All material facts contained in the moving party’s
statement that are not specifically controverted in respondent’s
statement are deemed admitted.
Mr. Courtright did not controvert the Receiver’s statement of undisputed material fact number nine.
Thus, it is deemed admitted.
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Mr. Courtright filed for Chapter 7 bankruptcy relief on June 11, 2025. 	The
Receiver filed an unsecured claim in the amount of $1,346,268.05. The Receiver also
filed 	this 	adversary 	proceeding 	seeking 	to 	have 	her 	judgment 	declared
nondischargeable pursuant to §§ 523(a)(2)(A) and 523(a)(19). The parties concluded
discovery, and the Receiver filed her Motion.
II. 	Discussion
A. Legal standard for motion for summary judgment
Federal Rule of Bankruptcy Procedure 7056 states that Federal Rule of Civil
Procedure 56 applies in adversary proceedings. Summary judgment shall be granted
“if the movant shows that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.” 	F ED. R. CIV. P. 56(a). 	“The
substantive law applicable to the case determines which facts are material.” Hurston
v. Anzo (In re Anzo), 547 B.R. 454, 463 (Bankr. N.D. Ga. 2016) (citation omitted). “For
issues upon which the moving party bears the burden of proof at trial, he must
affirmatively demonstrate the absence of a genuine issue of material fact as to each
element of his claim on that legal issue.” 	Id. at 463 (citation omitted). 	“A genuine
issue of material fact exists when the evidence is such that a reasonable jury could
return a verdict for the non-moving party.” Ismael v. Roundtree, 161 F.4th 752, 758
(11th Cir. 2025) (quoting Quigg v. Thomas Cnty. Sch. Dist., 814 F.3d 1227, 1235 (11th
Cir. 2016)).
Additionally, “[a]ll submitted evidence is viewed in the light most favorable to
the nonmovant and all justifiable inferences are drawn in its favor.” Harris v. Wells
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Fargo Bank N.A., No. 24-11138, 2025 U.S. App. LEXIS 16577, 2025 WL 1860290, at
*1 (11th Cir. July 7, 2025) (citation omitted). 	The court may not weigh conflicting
evidence or make credibility determinations. Hairston v. Gainesville Sun Publ'g Co.,
9 F.3d 913, 919 (11th Cir. 1993) (citation omitted). “The party moving for summary
judgment has the initial burden of demonstrating through evidence that there is no
genuine issue of material fact. The nonmovant must then rebut the movant with
evidence of a genuine dispute.” Harris, 2025 WL 1860290, at *1 (citation modified).
B. The 	Receiver 	is 	not 	entitled 	to 	summary 	judgment 	on 	her
§ 523(a)(2)(A) claim because Judge Durkin’s findings of fact and
conclusions of law did not address whether Mr. Courtright
possessed 	the 	fraudulent 	intent 	necessary 	for 	actual 	fraud
under § 523(a)(2)(A).
Judge Durkin’s findings of fact and conclusions of law did not address whether
Mr. Courtright possessed the necessary fraudulent intent for actual fraud under
§ 523(a)(2)(A). As will be explained below, the doctrine of collateral estoppel and the
Supreme Court case Bartenwerfer do not resolve the issue of whether Mr. Courtright
possessed the necessary fraudulent intent under § 523(a)(2)(A).
1. 	Collateral estoppel
“[T]he 	doctrine 	of 	collateral 	estoppel 	applies 	in 	a 	discharge 	exception
proceeding in bankruptcy court.” HSSM # 7 Ltd. P’ship v. Bilzerian (In re Bilzerian),
100 F.3d 886, 892 (11th Cir. 1996) (citations omitted). 	The parties dispute whether
federal or state collateral estoppel law should apply to the Illinois district court
judgment. The Receiver cited NBA Properties, Inc. v. Moir (In re Moir), 291 B.R. 887,
891 (Bankr. S.D. Ga. 2003) which applied the federal law of collateral estoppel. The
Receiver maintains that each element of collateral estoppel is met. 	[Mot. Summ. J.
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4-6, Adv. Proc. Dkt. No. 19]. 	Mr. Courtright cited St. Laurent v. Ambrose (In re St.
Laurent), 991 F.2d 672, 676 (11th Cir. 1993) which applied the elements of collateral
estoppel under Florida state law. 	Mr. Courtright maintains that not all of the
elements of collateral estoppel are satisfied in part because the issue Judge Durkin
addressed is different than a § 523(a)(2)(A) claim for actual fraud. 	[Resp. 7-9, Adv.
Proc. Dkt. No. 20].
The Illinois district court was exercising supplemental jurisdiction over the
Receiver’s claim under 740 ILCS § 160/5(a)(1).2 The Court has not found an Eleventh
Circuit decision which states whether a federal court deciding the collateral estoppel
effect of a prior judgment of a federal court exercising supplemental jurisdiction
should apply the federal law or state law of collateral estoppel. 	However, the
Eleventh Circuit has made it clear that federal courts apply the state rule of collateral
estoppel when a federal court’s jurisdiction is based on diversity citizenship: “We hold
that federal common law borrows the state rule of collateral estoppel to determine
the preclusive effect of a federal judgment where the court exercised diversity
jurisdiction.” 	CSX Transp., Inc. v. Gen. Mills, Inc., 846 F.3d 1333, 1340 (11th Cir.
2017); see also Wheeler Bros., Inc. v. Jones (In re Jones), 611 B.R. 685, 693-94 (Bankr.
M.D. 	Ala. 	2020) 	(“[I]f 	the 	federal 	court's 	jurisdiction 	was 	based 	on 	diversity
jurisdiction . . . courts must look instead to the applicable state's rules of collateral
estoppel.” (citation omitted)).
2 See Def.’s SOMF, Ex. B ¶ 13, Adv. Proc. Dkt. No. 21 (containing the complaint filed in the Illinois
district court action and alleging in paragraph 13 that jurisdiction is based on federal question
jurisdiction and supplemental jurisdiction).
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Other circuits addressing the issue of what collateral estoppel law applies to a
federal judgment based on supplemental jurisdiction over a state law claim have held
that the collateral estoppel law of the state in which the federal district court sits
applies. 	See Hatley v. Watts, 917 F.3d 770, 777 (4th Cir. 2019) (“[W]hen a federal
court exercises supplemental jurisdiction over a state law claim, federal common law
governs the preclusive effect of the federal court's disposition of that claim. The
federal rule of decision in such cases is to apply state preclusion law, unless the state
preclusion law is incompatible with federal interests.” (citations omitted)); Marini v.
Adamo (In re Adamo), 560 B.R. 642, 647 (Bankr. E.D.N.Y. 2016) (“W]hen a federal
court reviews the preclusive effect of state law claims decided by a federal court
exercising supplemental jurisdiction under 28 U.S.C. § 1367 in a federal question
case, the reviewing court applies the law of the state in which the federal court
exercising supplemental jurisdiction sat.” (citation omitted)).
Although the Eleventh Circuit has not addressed what collateral estoppel law
applies to a federal judgment based upon supplemental jurisdiction over a state law
claim, the Court will apply the collateral estoppel law of Illinois to the Illinois district
court judgment.3 The elements to collateral estoppel under Illinois law are
(1) the issue decided in the prior adjudication is identical
with the one presented in the current litigation; (2) there
3 For comparison purposes, the elements to collateral estoppel under federal law are
(a) the issue in the prior action and the issue in the bankruptcy court
are identical, (b) the bankruptcy issue was actually litigated in the
prior action, (c) the determination of the issue in the prior action was
a critical and necessary part of the judgment in that litigation, and (d)
the burden of persuasion in the discharge proceeding must not be
significantly heavier than the burden of persuasion in the initial
action.
In re Moir, 219 B.R. at 891 (citation omitted).
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was 	a 	final 	judgment 	on 	the 	merits 	in 	the 	prior
adjudication; and (3) the party against whom estoppel is
asserted was a party or in privity with a party to the prior
adjudication.
Lambert v. Riegle (In re Riegle), 665 B.R. 387, 391-92 (Bankr. C.D. Ill. 2024) (citing
Givens v. City of Chi., 234 N.E.3d 22, 36 (Ill. 2023)). 	However, even when the
elements of collateral estoppel are met, “collateral estoppel should not be applied
‘unless it is clear that no unfairness will result to the party sought to be estopped.’”
Id. at 392 (quoting Am. Family Mut. Ins. Co. v. Savickas, 739 N.E.2d 445, 451 (Ill.
2000)).
The second and third enumerated elements of collateral estoppel are easily
met. The Illinois district court judgment is a final judgment that was not appealed,
and Mr. Courtright was a party to the Illinois district court case. However, as will be
explained below, the first element is not met.
Concerning the first element,
[f]or an issue to be identical, “the party sought to be bound
must actually have litigated the issue in the first suit and
a decision on the issue must have been necessary to the
judgment in the first litigation.” The application of estoppel
“must be narrowly tailored to fit the precise facts and
issues that were clearly determined in the prior judgment.”
Furthermore, “the judgment in the first suit operates as an
estoppel only as to the point or question actually litigated
and determined and not as to other matters which might
have been litigated and determined.”
Givens, 234 N.E.3d at 37 (citation modified).
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Thus, the question is whether 740 ILCS §§ 160/5(a)(1) and 160/9, as Judge
Durkin applied them to Mr. Courtright, are an identical issue to a claim for actual
fraud under § 523(a)(2)(A). The Court finds they are not.
2. 	740 ILCS § 160/5(a)(1) and 11 U.S.C. § 523(a)(2)(A)
As explained above, Judge Durkin found that the sales commissions paid by
TGC to Mr. Courtright after November 3, 2017, were fraudulent in violation of the
Illinois Uniform Fraudulent Transfer Act. 	Part of Judge Durkin’s analysis focused
on 740 ILCS § 160/5(a)(1) which states
(a) A transfer made or obligation incurred by a debtor is
fraudulent as to a creditor, whether the creditor's claim
arose 	before 	or 	after 	the 	transfer 	was 	made 	or 	the
obligation was incurred, if the debtor made the transfer or
incurred the obligation: (1) with actual intent to hinder,
delay, or defraud any creditor of the debtor.
Judge Durkin also analyzed 740 ILCS § 160/9, titled “Voidable transfers or
obligations; rights of good-faith transferee.” 	Subsection (a) states “[a] transfer or
obligation is not voidable under paragraph (1) of subsection (a) of Section 5 against a
person who took in good faith and for a reasonably equivalent value or against any
subsequent transferee or obligee.”
11 U.S.C. § 523(a)(2)(A) excepts a debt from discharge if it is “for money,
property, services, or an extension, renewal, or refinancing of credit, to the extent
obtained by . . . false pretenses, a false representation, or actual fraud, other than a
statement respecting the debtor's or an insider's financial condition.” The Receiver’s
§ 523(a)(2)(A) claim is based on actual fraud.
In order to prevail on a claim under § 523(a)(2)(A), the creditor must prove by
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a preponderance of the evidence: (1) the debtor used false pretenses, or made a false
representation, or committed actual fraud; (2) the creditor relied on the debtor’s
conduct; (3) the creditor’s reliance was justified; and (4) the debtor’s conduct caused
the creditor’s loss. Harris v. Jayo (In re Harris), 3 F.4th 1339, 1344 (11th Cir. 2021)
(citations omitted). Additionally, “[w]hile all of the elements apply whether a plaintiff
asserts false pretenses, false representations, or actual fraud, ‘the analysis of the first
element varies depending on the cause of action asserted.’” 	PennyMac Loan Servs.,
LLC v. Brown (In re Brown), 677 B.R. 154, 159 (Bankr. N.D. Ala. 2025) (quoting Bank
of Fayette Cnty. v. Hampton (In re Hampton), 550 B.R. 773, 792 (Bankr. E.D. Ark.
2016)). Lastly, “[e]xceptions to discharge are strictly construed.” Gen. Ret. Sys. of the
City of Detroit v. Dixon (In re Dixon), 525 B.R. 827, 840 (Bankr. N.D. Ga. 2015).
The Supreme Court in Husky International Electronics, Inc. v. Ritz defined
“actual fraud” in the context of § 523(a)(2)(A) as follows:
This 	Court 	has 	historically 	construed 	the 	terms 	in
§ 523(a)(2)(A) to contain the “elements that the common
law has defined them to include.” “Actual fraud” has two
parts: actual and fraud. The word “actual” has a simple
meaning in the context of common-law fraud: It denotes
any fraud that “involves moral turpitude or intentional
wrong.” “Actual” fraud stands in contrast to “implied” fraud
or fraud “in law,” which describe acts of deception that
“may 	exist 	without 	the 	imputation 	of 	bad 	faith 	or
immorality.” Thus, anything that counts as “fraud” and is
done with wrongful intent is “actual fraud.”
578 U.S. 356, 360 (2016) (citation modified). 	“The term ‘actual fraud’ includes
fraudulent conveyances.” 	Lariat Cos., Inc. v. Wigley (In re Wigley), 15 F.4th 1208,
1211 (8th Cir. 2021) (citations omitted).
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The Supreme Court in Husky also addressed § 523(a)(2)(A) in the context of a
recipient of a fraudulent transfer:
It is of course true that the transferor does not “obtain”
debts in a fraudulent conveyance. But the recipient of the
transfer—who, 	with 	the 	requisite 	intent, 	also 	commits
fraud—can “obtain” assets “by” his or her participation in
the fraud. 	If that recipient later files for bankruptcy, any
debts 	“traceable 	to” 	the 	fraudulent 	conveyance 	will 	be
nondischargable 	under 	§ 	523(a)(2)(A). 	Thus, 	at 	least
sometimes a debt “obtained by” a fraudulent conveyance
scheme could be nondischargeable under § 523(a)(2)(A).
Such circumstances may be rare because a person who
receives fraudulently conveyed assets is not necessarily (or
even likely to be) a debtor on the verge of bankruptcy, but
they 	make 	clear 	that 	fraudulent 	conveyances 	are 	not
wholly incompatible with the “obtained by” requirement.
578 U.S. at 365 (emphasis added) (citation modified).
The Eighth Circuit has interpreted the applicability of § 523(a)(2)(A) to the
recipient of a fraudulent transfer as follows:
A transferee who receives a fraudulent transfer with the
requisite wrongful intent commits “actual fraud,” and any
debts traceable to the fraudulent transfer are excepted
from 	discharge. 	The 	transferee's 	intent 	must 	“involve
moral turpitude or intentional wrong.” The exception does
not cover implied fraud, which “describes acts of deception
that ‘may exist without the imputation of bad faith or
immorality.’”
Wigley, 15 F.4th at 1212 (citation modified).
An 	underlying 	state-court 	judgment 	imposing 	liability 	under 	a 	Uniform
Fraudulent Transfer Act on the recipient of a fraudulent transfer who did not take
the transfer in good faith ignorance of the fraud does not establish actual fraud under
§ 523(a)(2)(A). Dottore v. Wagner (In re Wagner), Ch. 13 Case No. 25-81284, Adv. No.
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26-8006, 2026 Bankr. LEXIS 2003, 2026 WL 2323027, at *11 (Bankr. D. Neb. Aug.
10, 2026); see also Turney v. Vulaj (In re Vulaj), 651 B.R. 310, 315 (Bankr. S.D. Cal.
2023) (denying a motion for summary judgment on a § 523(a)(2)(A) claim for actual
fraud in the context of an underlying judgment based on California’s Uniform
Voidable Transactions Act when the transferee did not take the transfers in good
faith). 	In Wagner, the receiver of a company that was a Ponzi scheme sued the
debtors in state court asserting that the transfers the debtors received from the
company were fraudulent transfers under the Ohio Uniform Fraudulent Transfer
Act. 	2026 WL 2323027, at *2. 	The receiver obtained a partial summary judgment
against debtor Andrew Wagner as the state court found the transfers to him were
fraudulent under Ohio law and he did not prove his good faith defense under Ohio
Rev. Code § 1336.08(A).4 Id. The debtors subsequently filed for bankruptcy, and the
receiver filed a dischargeability action against the debtors under § 523(a)(2)(A) for
actual fraud. Id. at *1.
The bankruptcy court held that the state-court partial summary judgment
against debtor Andrew Wagner did not establish the necessary fraudulent intent
required for actual fraud under § 523(a)(2)(A). Id. at *10-11. In reaching its decision,
the court noted that “[a] failure to prove good faith is not an affirmative finding of
moral turpitude or intentional wrongdoing, which § 523(a)(2)(A), as construed in
4 Ohio Rev. Code § 1336.08(a) states: “A transfer or an obligation is not fraudulent under division (A)(1)
of section 1336.04 of the Revised Code against a person who took in good faith and for a reasonably
equivalent value or against any subsequent transferee or obligee.” 	Ohio Rev. Code § 1336.4(A)(1)
states in pertinent part: “A transfer made or an obligation incurred by a debtor is fraudulent as to a
creditor . . . if the debtor made the transfer or incurred the obligation in either of the following ways:
(1) With actual intent to hinder, delay, or defraud any creditor of the debtor.”
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Husky and Wigley, requires.” Id. at *11.
Here, the issue before Judge Durkin was not identical to a claim for actual
fraud under § 523(a)(2)(A). Judge Durkin did not address in his findings of fact and
conclusions of law whether Mr. Courtright possessed “moral turpitude or intentional
wrongdoing” with his receipt of sales commissions for TGC. 	Instead, Judge Durkin
focused on whether Kenneth Courtright had actual intent to defraud TGC’s creditors.
Judge 	Durkin’s 	analysis 	of 	Mr. 	Courtright 	was 	whether 	he 	gave 	reasonably
equivalent value for the sales commissions he received from TGC and whether Mr.
Courtright took these sales commissions in good faith ignorance of TGC and Kenneth
Courtright defrauding TGC’s creditors. 	As noted in Wagner, a finding of a lack of
good faith in the receipt of fraudulent transfers does not establish the necessary
fraudulent intent required for actual fraud under § 523(a)(2)(A). 	Thus, the issue
before Judge Durkin was not identical to the Receiver’s claim for actual fraud under
§ 523(a)(2)(A).5
On top of the issue being different, Judge Durkin’s findings of fact and
conclusions of law do not have sufficient detail regarding Mr. Courtright’s intent
when he received the sales commissions from TGC. For a judgment to be entitled to
a preclusive effect, the “judgment should have sufficient detail to enable a subsequent
court to have a clear understanding of the prior court’s ruling without having to
5 Although the Court is not applying the federal law of collateral estoppel, the outcome would be the
same. “When issues in the bankruptcy proceeding ‘closely mirror’ issues in the prior action, the issues
are sufficiently identical for purposes of federal collateral estoppel.” In re Moir, 291 B.R. at 891-92
(citation omitted). Whether Mr. Courtright gave reasonably equivalent value for his sales commissions
from TGC and whether he took them in good faith ignorance of TGC’s fraud does not “closely mirror”
the issue of whether Mr. Courtright had the necessary wrongful intent when he received the sales
commissions from TGC.
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speculate about the scope of the prior court’s findings of fact or conclusions of law.”
Yust v. Henkel (In re Henkel), 490 B.R. 759, 781-82 (Bankr. S.D. Ohio 2013) (citation
omitted). In the absence of detailed findings regarding Mr. Courtright’s intent, this
Court is left to speculate about the scope of Judge Durkin’s findings of fact and
conclusions of law. The Court declines to do so.
3. 	Bartenwerfer does not apply to the underlying judgment.
The Receiver cites to Bartenwerfer and PRN Real Estate & Investors, Ltd. v.
Cole, 85 F.4th 1324 (11th Cir. 2023) in her Reply to support her position that since
Mr. Courtright was found liable under state law, there is no need to show that he
possessed 	fraudulent 	intent—i.e., 	Mr. 	Courtright’s 	intent 	is 	not 	part 	of 	the
§ 523(a)(a)(A) analysis. 	[Reply 1-3, Adv. Proc. Dkt. No. 23]. 	Mr. Courtright argues
in his Surreply [sic] that Bartenwerfer and PRN are not applicable because in those
cases “actual fraud was imputed upon the debtor via the underlying claim and
relationship context.” [Surreply 1, Adv. Proc. Dkt. No. 24].
Bartenwerfer 	addressed 	the 	dischargeability 	of 	a 	California 	state-court
judgment against business partners. 	598 U.S. at 72. 	The Bartenwerfers filed for
Chapter 7 bankruptcy after the California judgment was rendered against them, and
the creditor holding the judgment filed a dischargeability action under § 523(a)(2)(A).
Id. at 73. 	The Supreme Court ultimately affirmed the Ninth Circuit’s decision that
Kate Bartenwerfer’s judgment debt was nondischargeable under § 523(a)(2)(A) even
though she did not commit the fraud. Id. at 83.
In reaching its decision, the Court noted that “sometimes a debtor is liable for
fraud that she did not personally commit—for example, deceit practiced by a partner
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or an agent. . . . Written in the passive voice, § 523(a)(2)(A) turns on how the money
was obtained, not who committed fraud to obtain it.” Id. at 72. The Court also noted
that
§ 523(a)(2)(A) does not define the scope of one person's
liability for another's fraud. That is the function of the
underlying 	law—here, 	the 	law 	of 	California. 	Section
523(a)(2)(A) takes the debt as it finds it, so if California did
not extend liability to honest partners, § 523(a)(2)(A) would
have no role to play.
Id. at 81-82.
It could seem that Husky and Bartenwerfer conflict as Bartenwerfer provides
that a debt can be nondischargeable under § 523(a)(2)(A) even if the recipient of the
transfer did not commit fraud. Courts reconciling these two cases have found,
however, that they do not conflict. 	Wagner, 2026 WL 2323027, at *3; Dottore v.
Scheibal (In re Scheibal), Ch. 13 Case No. 24-55161, Adv. No. 85-1190, 2026 Bankr.
LEXIS 1203, 2026 WL 1379193, at *7-10 (Bankr. S.D. Ohio May 14, 2026); Vulaj, 651
B.R. at 314. Instead, there are two ways a debtor who is a transferee can be denied
a discharge for actual fraud under § 523(a)(2)(A):
Route 1: Bartenwerfer. The underlying law makes the
fraud the debtor's own, so the debt is itself a debt for fraud.
Section 	523(a)(2)(A) 	“takes 	the 	debt 	as 	it 	finds 	it.”
Bartenwerfer v. Buckley, 598 U.S. 69, 81-82 (2023).
Route 2: Husky. The debtor participated in the fraud with
the requisite intent, thereby “obtaining” the money “by”
that participation. Husky Int'l Elecs., Inc. v. Ritz, 578 U.S.
355, 365 (2016).
Wagner, 2026 WL 2323027, at *1.
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Even without a conflict between Husky and Bartenwerfer, courts disagree
about the scope of Bartenwerfer. Some courts have limited the parameters of
Bartenwerfer to agency and partnership contexts. Scheibal, 2026 WL 1379193, at *9-
10 	(collecting 	cases); 	Vulaj, 	651 	B.R. 	at 	314-15. 	Other 	courts 	have 	applied
Bartenwerfer to broader contexts where the underlying state law imposes liability for
the debt of another. Wagner, 2026 WL 2323027, at *3; Panjwani v. Khan (In re Khan),
652 B.R. 552, 562-65 (Bankr. S.D. Fla. 2023) (applying Bartenwerfer to a state-court
judgment for civil conspiracy where the defendants were jointly and severally liable).
This Court adheres to the latter view as the majority opinion in Bartenwerfer did not
expressly limit its holding to partnership or agency cases. See 598 U.S. at 72, 81-83.
Even by adhering to the latter view, Bartenwerfer does not encompass the underlying
judgment against Mr. Courtright.
Bartenwerfer does not apply here as the Illinois Uniform Fraudulent Act does
not impute liability for fraud upon Mr. Courtright. 	The court in Wagner noted that
the Ohio Uniform Fraudulent Transfer Act did not impute fraud on the debtor for the
transfer from the Ponzi scheme to the debtor. 	2026 WL 2323027, at *4. 	The court
reasoned 	that 	“[a] 	transferee's 	liability 	under 	the 	act 	is 	an 	independent,
restitutionary obligation to disgorge value received. It is not imputed liability for
fraud.” Id. (citation omitted). The Receiver does not argue that the Illinois Uniform
Fraudulent Act imputes TGC’s and Kenneth Courtright’s fraud onto Mr. Courtright,
and the Court has not found any authority that provides the Illinois Uniform
Fraudulent Act imputes TGC’s and Kenneth Courtright’s fraud onto Mr. Courtright.
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Judge Durkin’s findings of fact and conclusions of law are also silent on whether
TGC’s and Kenneth Courtright’s fraud were imputed onto Mr. Courtright. 	Thus,
Bartenwerfer does not apply to the Illinois district court judgment.
PRN also does not extend Bartenwerfer to this proceeding. In PRN, the debtor
transferred $4 million from one of his entities to an account held by him and his wife
to shield the money from the debtor’s creditors. 	85 F.4th at 1329. 	In analyzing
§ 523(a)(2)(A), the court noted that
sometimes the debtor receives a fraudulent transfer. That's
where 	§ 	523(a)(2) 	kicks 	in. 	If 	someone 	sends 	the
bankruptcy debtor money to fraudulently avoid his debt,
the party owed the money can have the debt excepted from
the recipient debtor's discharge—if the creditor can show
that, under state law, the recipient took on the sender's debt.
85 F.4th at 1342 (emphasis added).
The 	court 	also 	determined 	that 	“for 	a 	creditor 	to 	except 	a 	debt 	under
§ 523(a)(2)(A), the creditor must show that (a) the bankruptcy debtor obtained money,
property, or services by actual fraud; and, (b) the debt to be excepted resulted from
the debtor's fraudulent receipt.” Id. at 1346-47 (footnote omitted).6 The court noted
in a footnote at the end of the previous quote that “[a]s long as fraud was involved
when the debtor obtained the assets, the debtor need not be the party who committed
the fraud for § 523(a)(2)(A) to apply.” 	Id. at 1347 n.6 (citing Bartenwerfer, 598 U.S.
at 83).
6 The court in Wagner analyzed the PRN case and the two elements necessary for a § 523(a)(2)(A) claim
as follows: “The second requirement is satisfied here. The first is not. Whether a debtor who did not
commit the fraud nevertheless obtained money ‘by actual fraud’ turns on whether the underlying law
makes the debt a debt for fraud. California law did. Ohio's act does not.” 2026 WL 2323027, at *9.
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At issue in PRN was a Nevada alter ego statute that provided that an
individual could not be personally liable for a corporation’s debt unless the individual
acted as the alter ego of the corporation. Id. at 1348. The court noted that the Nevada
Supreme Court determined that the alter ego of the corporation becomes a debtor
“when the alter ego violates Nevada’s version of the Uniform Fraudulent Transfer
Act.” 	Id. at 1348-49. 	Ultimately, the court held that the plaintiff’s § 523(a)(2)(A)
claim was a viable Husky claim because the debtor transferred funds from one of his
companies to his tenants by the entireties account to shield it from collection which
could make him liable for his company’s debt under the Nevada alter ego statute. Id.
at 1347-49.
PRN does not apply here as the Illinois Uniform Fraudulent Transfer Act does
not result in Mr. Courtright taking on the debt of TGC and Kenneth Courtright. The
analysis in Wagner on this issue under the Ohio Uniform Fraudulent Transfer Act is
instructive: “Ohio law does not make the Wagners liable for Dente's and Buckham's
fraud. It makes them liable for holding money that is not theirs and makes them
disgorge the value. Those are different debts.” 	2026 WL 2323027, at *4. 	Judge
Durkin did not find that Mr. Courtright was liable for the debts of TGC and Kenneth
Courtright, 	only 	that 	Mr. 	Courtright 	was 	liable, 	under 	the 	Illinois 	Uniform
Fraudulent Transfer Act, for sales commissions paid to him by TGC after November
3, 2017. Thus, PRN does not apply to the Illinois district court judgment.
III. 	Conclusion
Accordingly, it is hereby
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ORDERED that the Receiver’s Motion is DENIED.
The Clerk is directed to serve a copy of this Order on counsel for the Receiver,
counsel for Mr. Courtright, and the Chapter 7 Trustee.
[END OF DOCUMENT]
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