⚖ Oral Arguments, with Context

The Ninth Circuit Bankruptcy Appellate Panel considers whether Steven Csigi can discharge about $564,000 in bankruptcy. His wife, Marylin, was trustee of her mother’s trust. A bankruptcy court found she misappropriated $858,639, including money used to settle a lawsuit against Steven and his family, expand their home, buy a car titled to Steven, and fund his bank account. After Steven filed Chapter 13, successor trustee Villia Ponce sued. The court held those benefits unjustly enriched Steven and bankruptcy could not wipe out the debt. It treated the debt as one for Marylin’s fiduciary defalcation—a culpable breach of fiduciary duty—even though Steven was not the trustee. Steven says the Supreme Court’s Bartenwerfer decision cannot make a passive recipient’s debt nondischargeable without an agency, partnership, or similar relationship. Ponce says the Code looks to the debt’s source and character, which she says flowed directly from Marylin’s misconduct.

In re Csigi (No. 25-1058) — United States Bankruptcy Appellate Panel of the Ninth Circuit, argued September 10, 2026.