Property held in trust.

- Because policies and procedures of the Georgia Lottery Corporation define "Confirmed" Instant Tickets as absolute proof that the retailer has received the tickets, in addition to tickets sold, all tickets "Confirmed" constitute property held in trust. Suwannee Swifty Stores, Inc. v. Ga. Lottery Corp. (In re Suwannee Swifty Stores), 266 Bankr. 544 (Bankr. M.D. Ga. 2001).

Funds which a bankruptcy debtor transferred post-petition to the Georgia Lottery Corporation were property of the statutory trust; although the debtor transferred these funds from the debtor's commingled general operating accounts, these payments were voluntary payments and the payments were conclusively presumed to be sufficiently connected to the trust. Suwannee Swifty Stores, Inc. v. Ga. Lottery Corp. (In re Suwannee Swifty Stores), 266 Bankr. 544 (Bankr. M.D. Ga. 2001).

Georgia Lottery Corporation was entitled to summary judgment on the corporations claim that the debt owed by a bankruptcy debtor, a lottery retailer, for proceeds from the sale of lottery tickets was nondischargeable under 11 U.S.C. § 523(a)(4) because O.C.G.A. § 50-27-21, enacted prior to the parties' contractual relationship, created a technical trust in favor of the creditor in the proceeds; the retailer contract created a fiduciary relationship before the creation of the debt, whereby the debtor had a duty to preserve and account for lottery proceeds, and the debtor committed a defalcation in a fiduciary capacity when the debtor failed to remit a large amount of money to the creditor. Ga. Lottery Corp. v. McKibben (In re McKibben), Bankr. (Bankr. N.D. Ga. Jan. 5, 2005).

Georgia Lottery for Education Act, O.C.G.A. § 50-27-21(a), created a statutory trust in favor of the Georgia Lottery Corporation over proceeds from sale of lottery tickets; that statutory trust was an express trust and therefore imposed a fiduciary duty upon the retailer and the retailer's Chapter 7 debtor/officers within the meaning of 11 U.S.C. § 523(a)(4). Ga. Lottery Corp. v. Ingram (In re Ingram), Bankr. (Bankr. N.D. Ga. Feb. 29, 2008).

Lotteries.

- Bank converted state lottery funds when those funds were deposited in the retailer's segregated lottery account and the bank later put a hold on the funds at the retailer's request and prevented the state lottery from accessing the funds. Once the funds were deposited into the lottery account, neither the bank nor the retailer had authority to restrict the state lottery's access to those funds. Ga. Lottery Corp. v. First Nat'l Bank, 253 Ga. App. 784, 560 S.E.2d 345 (2002).

Fiduciary duty.

- In a Chapter 7 bankruptcy proceeding, a debtor's failure to remit lottery proceeds from the debtor's retail store to the Georgia Lottery Corporation satisfied the defalcation while acting in a fiduciary capacity exception to discharge provision under § 523(a)(4) of the Bankruptcy Code, 11 U.S.C. § 523(a)(4). Georgia Lottery Corp. v. Thompson (In re Thompson), 296 Bankr. 563 (Bankr. M.D. Ga. 2003).

Contract with the creditor, and O.C.G.A. § 50-27-21(a), imposed a fiduciary duty on a debtor to deposit the proceeds of lottery ticket sales on a daily basis in a trust account; the debtor's failure to comply with the terms of the contract amounted to defalcation and the debt was nondischargeable under 11 U.S.C. § 523(a)(4). Ga. Lottery Corp. v. Lien Sun (In re Liguan Sun), Bankr. (Bankr. N.D. Ga. Sept. 27, 2004).

State lottery corporation was entitled to entry of judgment as a matter of law on the corporation's claim against a bankrupt debtor, the sole owner of a retailer that sold lottery tickets, because: O.C.G.A. § 50-27-21(a) expressly imposed a fiduciary duty on the debtor as the sole officer of the retailer, the requirement of an express trust pre-dating the debt existed, and the debtor committed an act of defalcation by using lottery funds to cover expenses of the retailer. Ga. Lottery Corp. v. Farhan (In re Farhan), Bankr. (Bankr. N.D. Ga. Sept. 30, 2004).

O.C.G.A. § 50-27-21, which pertains to lottery ticket retail sellers, imposes fiduciary duties on the retailers sufficient to create a technical trust for purposes of nondischargeability under 11 U.S.C. § 523(a)(4) because: (1) the statute establishes a trust relationship at the time a lottery retailer enters into a retailer contract; (2) any debt arising out of that relationship is not created until the retailer later fails to account for lottery proceeds; (3) the statute specifically sets forth fiduciary duties to account for lottery proceeds, to maintain lottery proceeds in a separate account, and to make daily deposits in the trust account; (4) the delineation of these duties, along with the express language of the statute, impose a trust relationship over lottery proceeds; and (5) the trust res, the lottery proceeds, is separately identifiable. Ga. Lottery Corp. v. Premji (In re Premji), Bankr. (Bankr. N.D. Ga. Sept. 14, 2006).

Debt owed by a Chapter 7 debtor, who was the sole owner of a lottery retailer, to a state lottery creditor was not dischargeable under 11 U.S.C. § 523(a)(4) because: (1) O.C.G.A. § 50-27-21 and the retailer contracts that the debtor had signed imposed fiduciary duties on the debtor and were sufficient to create a technical trust with regard to the lottery proceeds; and (2) the debtor's failure to properly account for sales proceeds, and the debtor's improper withdrawal of funds from the lottery sales proceeds trust fund account that the debtor was required to set up and maintain, constituted "defalcation" for purposes of nondischargeability under 11 U.S.C. § 523(a)(4). Ga. Lottery Corp. v. Premji (In re Premji), Bankr. (Bankr. N.D. Ga. Sept. 14, 2006).

After Chapter 7 debtors, officers of a retail business that sold lottery tickets, were responsible for depositing funds from sales of lottery tickets into a segregated account maintained by their corporation for purpose of remitting lottery proceeds to the state, and failed to do so, the debtors committed defalcation within the meaning of 11 U.S.C. § 523(a)(4) because the debtors had the obligation to account for and produce either the full amount of funds derived from the sale of lottery tickets or unsold tickets. Ga. Lottery Corp. v. Ingram (In re Ingram), Bankr. (Bankr. N.D. Ga. Feb. 29, 2008).

When a debtor's company failed to deposit sufficient funds into an account for lottery ticket sales proceeds, the debt owed to a lottery corporation was nondischargeable under 11 U.S.C. § 523(a)(4) because the debtor owed fiduciary duties to the lottery corporation and the debt was the result of the debtor's failure to properly perform those duties. Ga. Lottery Corp. v. Jackson (In re Jackson), 429 Bankr. 365 (Bankr. N.D. Ga. 2010).

Failure by debtor, the president of a lottery retailer, to remit lottery sale proceeds to the state lottery corporation constituted a defalcation while performing the debtor's fiduciary duty, as imposed under O.C.G.A. § 50-27-21(a), entitling the corporation to summary judgment in the corporation's action, which alleged that the debt was nondischargeable under 11 U.S.C. § 523(a)(4). Ga. Lottery Corp. v. Akhawala (In re Akhawala), Bankr. (Bankr. N.D. Ga. Oct. 18, 2004)(Unpublished).

Adversary proceedings which the Georgia Lottery Corporation filed against Chapter 7 debtors who were authorized to sell lottery tickets, which alleged that the debtors failed to remit $6,022 the debtors collected from the sale of lottery tickets, sufficiently alleged that the debtors owed a debt to the corporation that was nondischargeable under 11 U.S.C. § 523(a)(4) because the debt resulted from the debtors' defalcation while acting in a fiduciary capacity. The Georgia Lottery for Education Act, O.C.G.A. § 50-27-21, which governed Georgia Lottery retailers, set forth all the elements of a technical trust because it created a trust fund, identified the trust res, and outlined a lottery retailer's fiduciary duty to preserve and account for lottery proceeds. Ga. Lottery Corp. v. Koshy (In re Koshy), Bankr. (Bankr. N.D. Ga. Sept. 24, 2010).

Defendant, a 51 percent owner of a company that contracted to serve as a Georgia lottery retailer, was a fiduciary under the Georgia Lottery for Education Act because the provisions state that a lottery retailer and officers of a lottery retailer's business shall have a fiduciary duty to preserve and account for lottery proceeds and lottery retailers shall be personally liable for all proceeds, O.C.G.A. § 50-27-21(a). Neither debtor's lack of daily supervision at the store nor the debtor's lack of supervision on the specific dates provided a convincing legal defense or absolved debtor's fiduciary duty. Furthermore, in this 11 U.S.C. § 523(a)(4) matter, the debtor's unsupported allegations that the lottery proceeds were stolen were insufficient to raise any issue of fact and the owner owed a personal fiduciary duty to the creditor. Ga. Lottery Corp. v. Kunkle (In re Kunkle), 462 Bankr. 914 (Bankr. N.D. Ga. 2011).

Chapter 7 debtor's breach of the debtor's fiduciary duties under Georgia law as the officer of a lottery retailer was grounds for denying a discharge of an amount due as a defalcation while acting in a fiduciary capacity. However, summary judgment was only granted in favor of the creditor with respect to the first week for which the debtor failed to account for and remit proceeds, based on the debtor's allegation that the debtor was locked out of the debtor's business property by the debtor's landlord and was thus unable to deposit the lottery proceeds or access the remaining lottery tickets left on the premises in subsequent weeks. Ga. Lottery Corp. v. Carter (In re Carter), Bankr. (Bankr. N.D. Ga. Mar. 4, 2015).