In re Sharpe
United States Bankruptcy Court for the Northern District of Texas
351 B.R. 409 (2006)
Baker (plaintiff) loaned Sharpe $150,000 total, believing him wealthy based on his lifestyle, spending habits, and appearance, and relying on Sharpe's verbal assurance he could repay using assets he was hiding from his ex-wife; testimony showed Sharpe had been preparing to file bankruptcy for months when he took these loans, and he ultimately did file, prompting Baker to argue his debt should be nondischargeable as fraud under 11 U.S.C. §523(a)(2)(A).
Whether a debt obtained through a debtor's verbal and behavioral (rather than written) false representations about his financial condition is dischargeable in bankruptcy despite the creditor's reasonable reliance on those representations.