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Financial Services Law Insights and Observations

Computer financing operator cannot use bankruptcy to discharge $13.4 million judgment

Federal Issues FTC Consumer Finance Bankruptcy Courts

Federal Issues

On February 1, the FTC announced that the U.S. Bankruptcy Court for the Southern District of Florida ruled that the operator of a computer-financing scheme cannot use his bankruptcy to discharge a $13.4 million judgment entered in 2016 for violating a 2008 FTC order. The FTC alleged that the defendant and his affiliated companies collected more than $14 million from consumers based on promises that they would finance the purchase of new computers but failed to actually deliver the computers. The court determined that the contempt judgment issued in 2016 could not be discharged because it resulted from the defendant’s fraudulent conduct “based on both misrepresentation and concealment.” In a press release describing the ruling, the FTC stated that the defendant’s attempt to shield himself from complying with the order by filing for bankruptcy was an attempt to “avoid justice.”

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