The Supreme Court has granted cert in the 11th Circuit case of Bullock v. BankChampaign, N.A. You can get all the briefs from the link. This is a section 523(a)(4) action. The debtor/defendant was the trustee of a trust. He caused the trust to loan money to his mother and himself. They used the funds to buy real property. They later paid back the loans with interest but the benys of the trust want the “profits” earned by the debtor in the form of increase in value of the real property that were purchased with the money. The state court proceeding awarded the profits to the benys plus attorneys fees. Given there is no “loss of trust property,” is there a defalcation?
Oral argument will probably be in March or April, 2013.