American Journal of Trial Advocacy

Authored by: Sydney F. Jeffcoat

This Comment analyzes the Supreme Court’s recent decision in Bartenwerfer v. Buckley. In a unanimous opinion authored by Justice Amy Coney Barrett, the Court held that, in the partnership context, a debtor may be held liable for a partner’s fraud regardless of the debtor’s own culpability. Applying a strict textualist approach, the Court interpreted 11 U.S.C. § 523(a)(2)(A) to bar discharge of fraud-related debts even when the debtor lacked knowledge of or participation in the fraud.

This Comment first traces the origin and historical development of the fraud-discharge exception. It then examines the competing approaches courts have applied in such cases, including the “knowledge of fraud” and “receipt of benefits” tests. Next, it discusses the Court’s reasoning and holding in Bartenwerfer. It also briefly addresses Justice Sotomayor’s concurring opinion, which clarifies that the decision is grounded in principles of partnership liability rather than the parties’ marital relationship.

Finally, this Comment evaluates the practical implications of Bartenwerfer, including strategies debtors may use to mitigate exposure to liability for a partner’s misconduct. Although the decision arguably departs from the Bankruptcy Code’s “fresh start” policy, it reflects a judgment that creditors deserve heightened protection in cases involving fraud. Moreover, the Court’s imposition of shared liability aligns with the fundamental nature of partnerships, which is to allocate both profits and risks among partners.