In Re: Wilson Complaint to Determine Dischargeability of Debts

UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF OHIO EASTERN DIVISION AT COLUMBUS
In re:
NASHEL
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Jose J. Cabrera,
Case No. 18-56909
Chapter 7 Judge Hoffman

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Plaintiff,
v.
Nashely J. Wilson,
Defendant.

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Adv. Pro. No. 18-2155
Capitol South Community Urban Redevelopment Corporation,
Plaintiff,
v.
Nashely J. Wilson,
Defendant.
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Adv. Pro. No. 19-2013
OPINION ON COMPLAINTS TO DETERMINE DISCHARGEABILITY OF DEBTS
This document has been electronically entered in the records of the United
States Bankruptcy Court for the Southern District of Ohio.

IT IS SO ORDERED.
Dated: March 27, 2020
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I. Introduction

These adversary proceedings have their genesis in a concert produced by the Chapter 7 debtor,
Nashely Wilson. The manager of the concert venue, Capitol South Community Urban Redevelopment
Corporation, remained unpaid after the concert, as did Jose Cabrera, a friend of Wilson’s who
provided her funds to cover the event’s expenses in exchange for the promise of receiving his money
back twofold. Capitol South and Cabrera ask that Wilson’s debts to them be excepted from her
bankruptcy discharge. Capitol South contends that Wilson obtained the use of the concert venue
through false pretenses, a false representation, or actual fraud within the meaning of §
523(a)(2)(A) of the Bankruptcy Code. Cabrera alleges that Wilson persuaded him to lend her money
using those same means and that she also willfully injured him by taking his money without
intending to repay it, making her debt to him nondischargeable under both § 523(a)(2)(A) and
§ 523(a)(6). To prevail on a nondischargeability claim under § 523(a)(2)(A), a creditor must
demonstrate that the debtor intended to defraud the creditor, and to succeed under § 523(a)(6) the
creditor must show that the debtor intended to injure the creditor or the creditor’s property. The
plaintiffs, however, were unable to prove that Wilson had any such intent. Instead, it appears that
they went unpaid because Wilson lacked the ability to pay all her debts arising from the concert
after it generated little, if any, net revenue. Wilson’s debts to Cabrera and Capitol South
accordingly are discharged. In the end, while the plaintiffs succeeded in showing that Wilson was
an inexperienced—and perhaps inept—concert promoter, they failed to demonstrate that she is a
fraudster or that she acted with intent to harm them.
II. Jurisdiction and Constitutional Authority

The Court has jurisdiction to hear and determine these adversary proceedings under 28 U.S.C. §
1334(b) and the general order of reference entered in this district under 28 U.S.C.
§ 157(a). This is a core proceeding. 28 U.S.C. § 157(b)(2)(I). Because disputes over the

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dischargeability of debts “stem[] from the bankruptcy itself,” the Court also has the
constitutional authority to enter final judgments in these adversary proceedings. Hart v. S.
Heritage Bank (In re Hart), 564 F. App’x 773, 776 (6th Cir. 2014) (quoting Stern v. Marshall, 564
U.S. 462, 499
(2011)).

III. Procedural History

On October 31, 2018, Wilson filed a voluntary petition for relief under Chapter 7 of the Bankruptcy
Code. That same day, she filed her schedules of assets and liabilities, listing on Schedule E/F an
unsecured debt to Capitol South in the amount of $70,290 and an unsecured debt to Cabrera in the
amount of $80,000. Wilson received a discharge under § 727 of the Bankruptcy Code. Cabrera and
Capitol South, however, commenced adversary proceedings seeking to have the debts owed to them
declared nondischargeable. With the agreement of the parties, the Court entered an order providing
that the adversary proceedings would be tried concurrently. Doc. 8. The trial was held over the
course of two days. The transcript of the first day of the trial is docketed at Doc. 17 in Adv. No.
18-2155 (“Transcript I”), and the transcript of the second day is located at Doc. 19 of the same
adversary proceeding (“Transcript II”). The Court heard the testimony of Wilson, Cabrera, and
Nicholas Stefanik, a representative of Capitol South. In addition, the parties stipulated to the
admission into evidence of Plaintiffs’ Exhibits 1 through 22, and Plaintiffs’ Exhibits 23 through
25 were admitted into evidence without objection. The parties submitted proposed findings of fact
and conclusions of law after the trial.
IV. Findings of Fact

Based on the evidence adduced at trial, including the documentary evidence and the testimony
presented, and having considered the demeanor and credibility of the witnesses, the Court makes the
findings of fact set forth below.

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A. Events Leading to the Yandel Concert

Wilson, who is originally from Bolivia, is bilingual in Spanish and English, while Cabrera
primarily speaks Spanish. Tr. I at 19; Tr. II at 20.1 Beginning around 2013, Wilson began marketing
what she described as her “brand” to the Spanish-speaking community in Columbus, Ohio. She did this
through a magazine known as “Hola Columbus” and a television show called “Hola TV” that included
segments focused on fashion and local events of interest to the Hispanic community. Tr. II at 22.
Her twin goals were “becoming the bridge between the American market and the Hispanic market” and
“building a career as an entrepreneur.” Id. at 23. Working toward those goals, Wilson started
producing concerts in local clubs, undeterred by her lack of any education or experience that would
have prepared her to handle the financial aspects of concert production. Id. at 21–23.
By the time Wilson met Cabrera in the summer of 2016, she had spent the past several years
producing one or two concerts per year in the Columbus area. Tr. I at 140–41; Tr. II at 22. With an
average attendance of around 200, those events were viewed by Wilson as successful, and they
increased her confidence in her ability as a producer. Tr. II at 22. It was then that Cabrera
contacted Wilson through a social media platform in order to purchase VIP tables at a Wilson-
produced concert to be held in a nightclub called Euphoria. Tr. I at 140; Tr. II at 25. Wilson and
Cabrera met face-to-face for the first time at the Euphoria concert. Tr. II at 14. Cabrera
considered the event a success, estimating a crowd that numbered around 700 to 800 to be much
higher— anywhere from 1,000 to 1,200. Tr. I at 114–15; Tr. II at 7–8, 43.

1 Wilson testified in English while Cabrera testified in Spanish through an interpreter, who not
only translated his testimony, but also interpreted statements made by others so that Cabrera could
understand everything that was said during the trial.

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After the Euphoria concert, Cabrera and Wilson began meeting at clubs and various other venues for
social gatherings with friends and family members, including Cabrera’s now ex-wife, Fabiola
Alvarez. Tr. I at 141–42, 145; Tr. II at 8, 25. According to Cabrera, “there are very few of us
Latinos here in Columbus, and so those that are here, we try to get together with each other and do
things together . . . . And I would say that all of us know each other in those places.” Tr. I at

  1. Wilson used the affectionate nickname “Juancito” for Cabrera, and she endeared herself not
    only to him, but to Alvarez as well. Tr. I at 142, 147. Over time, Cabrera developed a relationship
    with Wilson that he considered a friendship. Tr. I at 141–43, 150, 152; Tr. II at 9, 14. He even
    came to trust Wilson enough to lend her $1,000 on one occasion and an undisclosed amount on
    another. Id. at 142, 157. She paid him back in a timely fashion both times, increasing his trust in
    her. Id.; Tr. II at 9.
    Buoyed by her earlier success producing relatively small events, Wilson became determined to
    produce a concert on a much larger scale. She ultimately decided on the singer Yandel, whom she
    describes as “one of the most well-known artists in the Hispanic community” and “the Justin Bieber
    of the Latin community.” Tr. II at 24. Yandel agreed to appear for a concert in Columbus on May 20,
  2. Wilson’s research revealed that Yandel had “performed in many different places” and that he
    had “filled out different venues [with] thousands of people[.]” Id. at
  3. Based on the size of the crowds that Yandel had drawn in other cities, Wilson believed that his
    concert in Columbus would draw an audience of no less than 5,000. Id. at 24, 33–34. In a
    development that could only have encouraged her optimism, several corporate sponsors— Musicon,
    Corona, Modelo, El Manantial, and La Michoacana Market—collectively provided her a total of $43,500
    of sponsorship dollars in exchange for advertising during the concert. Tr. I at 20–24.
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Despite the financial boost those funds provided, Wilson still needed additional capital to cover
the concert’s up-front costs. For one thing, sponsorship dollars were Wilson’s primary source of
income, and she would have needed to use some of those funds for living expenses. Id. at 20–21. For
another, Yandel’s flat performance fee alone was $50,000, and thousands of dollars more were needed
to pay for flights and hotels rooms for the musician and his entourage in addition to all the other
concert-related expenses. Tr. II at 69–72. Wilson originally planned to obtain the additional
funding from “Fadi,” a local restaurateur who had provided her with funds in connection with an
earlier event that she had produced. Id. at 31–32. Cabrera was aware of this potential infusion of
cash from Fadi and offered to provide funds for the Yandel concert himself if Fadi decided not to
do so. Id. at 32. After Fadi ultimately declined to fund the concert, Wilson recalled Cabrera’s
offer and reached out to him by phone. Id. During the call, she made Cabrera aware of the
sponsorships she had obtained and told him how confident she was that the Yandel concert would be a
success. Tr. II at 9. She also told him that she needed $40,000 within two days for the concert to
take place. Tr. I at 149; Tr. II at 14–15. Cabrera said he would try to raise the money she needed.
He then asked Alvarez to help with the funding, and she agreed to participate. Tr. I at 149–50. So
too did a friend of Cabrera’s, Sergio Flores. Id.
The terms of the funding that Cabrera arranged were memorialized in an agreement dated March 28,
2017 (the “Cabrera Agreement”), which stated:
Investment agreement by and between Jose J. Cabrera, Fabiola Alvarez, and [Nashely] Wilson DBA Hola
TV, LLC.

Mr. Jose J. Cabrera and Ms. Fabiola Alvarez deposited $40,000 (forty thousand and 00/100) as
investing amount for the Yandel concert event taking place May 20th, 2017 at the Columbus Commons.
In return, they will receive the full amount of $40,000 (forty thousand and 00/100) back plus 50%
of all revenue after

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expenses, totaled at $80,000 (eighty thousand and 00/100), by June 30th, 2017.

Ex. 20.

Complying with the agreement, Cabrera provided Wilson $40,000 in two separate installments: (i) a
$24,000 check written by Flores; and (ii) a $16,000 check comprised of $6,000 from Cabrera and
$10,000 from Alvarez. Tr. I at 150–51; Tr. II at 6–7; Ex. 15. The Cabrera Agreement made clear that
the amount being contributed by Cabrera, Alvarez, and Flores was to be used “for the Yandel
concert.” Ex. 20. Consistent with that requirement, the $16,000 contributed by Cabrera and Alvarez
was deposited into one of Wilson’s bank accounts on March 28, 2017, and this very amount was then
wired to an entity known as Live Nation on behalf of Yandel that same day. Ex. 3 at 13–14. No
evidence was offered by the plaintiffs demonstrating how Wilson used the $24,000 contributed by
Flores. Nor did they present evidence suggesting that any of the funds Wilson received under the
Cabrera Agreement were used for anything other than the Yandel concert.
Under the terms of the Cabrera Agreement, Wilson agreed to return to Cabrera and Alvarez the
$40,000 she received while also paying them “50% of all revenue after expenses,” estimated to be an
additional $40,000, within 40 days after the concert. Ex. 20. With a minimum ticket price of $35
and a price of $65 for VIP tickets, Tr. I at 64, ticket sales of 5,000 would have generated more
than $175,000 of gross revenue. Given this, Wilson’s estimate that “50% of all revenue after
expenses” would equal $40,000 was not completely unreasonable, and her intentions “were always to
pay back” Cabrera. Tr. II at 73.
At the time she obtained the funding from Cabrera, Wilson had already entered into an agreement
with Capitol South, the manager of a park in downtown Columbus known as the Columbus Commons, to
use the park as the concert venue. Ex. 1; Tr. I at 124–26. Wilson chose

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Capitol South because the Commons had the capacity to hold the thousands of concertgoers Wilson was
anticipating. Tr. I at 27, 61–62. Upon receipt of Wilson’s application to use the Commons,
Stefanik, who was Capitol South’s event manager, reached out to her to discuss the logistics of the
event. Id. at 136. During their initial discussions, Wilson informed Stefanik that she had produced
several concerts in smaller venues. Id. Stefanik recognized that a concert held at the Commons
“would be a step up, but it seemed like the prerequisite foundational skills were there from

[their]

initial conversations.” Id. at 137. Following these discussions, Wilson and Capitol South
entered into a license agreement in January 2017 for the use of the Commons four months later on
May 20, 2017 (the “Capitol South Agreement”). Ex. 1 at 1. The Capitol South Agreement required
Wilson to make an initial deposit of $2,000, which Wilson paid. Tr. I at 127. In addition to
requiring the deposit, the Capitol South Agreement also imposed future obligations on Wilson,
including the obligation to obtain insurance for the event and to pay a percentage of the amount
due Capitol South no later than five days before the concert, with the balance due within 14 days
following the event. Ex. 1 at 1. Capitol South and Wilson ultimately agreed that the amount she
would need to pay before the concert was $20,000. Tr. I at 127.
With the venue and funding secured, Wilson promoted the concert in various ways. She gave an
estimated 50 to 100 tickets to a disk jockey known as “DJ Juan” in exchange for his assistance in
promoting the concert and provided 50 complementary tickets to a radio station, La Mega 103.1, that
also helped promote the concert. Id. at 28–29. Wilson sold tickets for the Yandel concert through
Eventbrite and the La Michoacana Market. Id. at 30.
At some point after Wilson obtained the funding from Cabrera, it became evident that ticket sales
were falling far below her expectations. Concerned about the pace of ticket sales in the days
leading up to the concert, she redoubled her promotional efforts, driving to other major cities

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around Ohio in an attempt to bring in concertgoers from outside of Columbus. Id. at 75–76. And yet,
the day before the event, only about 239 tickets had been sold by Eventbrite and Michoacana
combined. Ex. 18; Tr. I at 91. Around 100 of those tickets were sold through Michoacana, generating
roughly $3,500 a few days before the concert. Id. at 31–32. Eventbrite sold the remaining 139
tickets, providing Wilson with proceeds of $7,403 starting in March 2017 and continuing up to a
couple of days before the concert. Id. at 38; Exs. 18, 23. In total, the proceeds of ticket sales
before the concert were approximately $10,900.
In the meantime, Capitol South was asking Wilson for the $20,000 that was due no later than five
days before the concert. Tr. I at 82, 127–28. Rather than paying Capitol South, Wilson instead paid
other concert-related expenses using the proceeds of pre-concert ticket sales, sponsorship funds,
and the funding she had received from Cabrera and Alvarez. Wilson authorized funds to be deposited
from one of her bank accounts into an account maintained by her brother so that he could take care
of the logistics of paying certain expenses, including approximately $8,300 for hotel rooms for
Yandel and his team and $1,100 for the portable restrooms that were going to be installed at the
Commons for the event. Id. at 32–33, 72–73. An unnamed friend of Wilson’s used a credit card to
cover the approximately $15,000 cost of airfare for Yandel and his retinue. Tr. II at 54, 58–59. An
individual named Carlos Rodriguez lent Wilson $10,000 to pay for other expenses related to the
concert, and she also used between $5,000 and $5,500 of her own savings to pay for still other
expenses. Id. at 32, 47–48, 57–58. Any portion of Yandel’s $50,000 appearance fee that had not yet
been paid would have been paid at this point. Although only
$41,000 of the $50,000 is readily identifiable in Wilson’s bank statements as having been paid, the
entire fee must have been paid, because Yandel would not have performed if his up-front appearance
fee had not been paid in full before the concert. Id. at 69–71.

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Likewise, Capitol South would not have made the Commons available to Wilson on the day of the
concert if it had not received a check for the $20,000 that was then due. Tr. I at 128. On the
morning of the concert, therefore, Wilson issued a check to Capitol South in the amount of
$20,000. Ex. 2; Tr. I at 52–53, 127. Because the balance in her bank accounts on an aggregate basis
was close to zero or even negative at that point, Wilson almost certainly knew when she issued the
check that the account lacked sufficient funds to cover it. Tr. I at 60–61. But no evidence
suggests that Wilson represented to Capitol South that the account contained sufficient funds. And
because it was inconceivable to Wilson that Yandel would not draw thousands to his concert, she was
still anticipating an influx of ticket buyers at the door. She accordingly issued the check the
morning of the concert with the expectation that the proceeds of ticket sales later in the day
would be enough for her to deposit the funds needed to cover the check after the concert. Id. at
61–62; Tr. II at 30. But it was not to be.
B. The Concert’s Financial Failure

Despite Wilson’s last-ditch efforts to salvage the concert, her prediction that Yandel would bring
in at least 5,000 concertgoers ultimately turned out to be high by several thousand people. Cabrera
estimated the crowd at “between 1,500 to 1,800 people in addition to the 30 VIP tables that were
full.” Tr. I at 153. But Cabrera appears to have overestimated the size of the crowd by several
hundred people, just as he did with the Euphoria concert. The size of the crowd was more likely in
line with the 1,000 to 1,500 range estimated by Wilson. Id. at 69. On top of that, only a portion
of those in attendance had actually paid for tickets purchased through Eventbrite or Michoacana.
About 150 of the concertgoers used complementary tickets that Wilson had given away to promote the
concert. And, exploiting her failure to use ticket scanners, several hundred more used counterfeit
tickets, the proceeds of which did not make their way to Wilson. Id. at 64– 65.

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The precise number of tickets actually purchased from Wilson at the gate is uncertain, but appears
to have been around 250. Id. at 91. This number of tickets would have generated gross proceeds of
only $8,750 (250 times $35 per ticket). Wilson also sold alcohol at the concert, but the only
evidence presented regarding the amount of cash generated by alcohol sales is that Cabrera
purchased $700 of alcohol for his friends and family. Although additional alcohol was purchased, no
evidence was offered that would provide a basis for placing a dollar amount on purchases other than
those made by Cabrera. Id. at 64; Tr. II at 16–18, 42. In total, then, the evidence establishes
that tickets purchased at the gate and the sale of alcohol generated gross proceeds of
approximately
$9,450.

Wilson used proceeds from tickets sold at the gate and alcohol sales to cover various expenses that
had to be paid the day of the concert, including the per-diem expenses of Yandel’s team and the
costs of providing a disk jockey, bartenders, and security personnel, all of which would have
totaled $7,300 if the per-diem expenses for Yandel were the $2,800 budgeted by Wilson. Tr. I at
63–69. Given that the per-diem expenses were closer to $3,500, id. at 63, the total expenses the
day of the concert were at least $8,000. With gross proceeds of $9,450 and same- day expenses of
at least $8,000, the net profit generated the day of the concert was at most $1,450.
Wilson’s net profit was perhaps closer to zero. When Yandel’s manager asked Wilson to pay the
per-diem expenses immediately before the artist went on stage, she “started collecting all the
money that was at the door,” then “counted everything around behind the stage,” and “started
counting cash to him, because [she] just needed the event to go through.” Id. at 63. She does not
“remember who [she] gave cash to” and it “all got out of hand.” Id. at 63. Her method of paying
other expenses later that evening was equally shambolic: “I had a lot of people, like the
bartenders and securities, done with their work and they were all coming up to me for payments, so
I started

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pulling out money from the door or the alcohol to start paying everybody that worked the night of
the event.” Tr. II at 44. Given the haphazard manner in which Wilson distributed cash the day of
the concert in order to pay the event’s expenses, her net profit may have been less than the amount
the Court calculated above, and it very likely was zero or close to it.2
Wilson’s recollection is that she had no cash left at the end of the day. Tr. I at 63. Although the
plaintiffs posit that Wilson walked away from the concert with close to $20,000 of cash that she
never deposited into any of her bank accounts, there is simply no evidence supporting that
contention.
C. Events Occurring After the Concert

Several days after the concert, the $20,000 check that Wilson issued to Capitol South was returned
for insufficient funds. Ex. 2; Tr. I at 129.3 Upon the check’s return, Capitol South reached out to
Wilson with a request that she pay the amount due under the Capitol South Agreement, but she failed
to respond. Exs. 7, 8, 9; Tr. I at 130–31. Instead, like a gambler trying to recoup her losses by
doubling down, Wilson planned to pay the outstanding expenses from the Yandel concert

2 Capitol South points to Exhibit 19, a document entitled “Yandel Concert,” as a basis for finding
that her expenses both before and after the concert were only $86,400 (the $95,400 set forth in the
document minus the $9,000 that Capitol South contends was not ultimately paid to Yandel). No
evidence was presented establishing the date on which the document was prepared, but at trial the
document was consistently described as a “budget.” Tr. I at 67–69. By definition, a budget is a
pre-event estimate of expenses, not a tally of expenses actually paid.
3 Capitol South contends that the insurance policy that was required to be in place for the concert
to go forward never became effective because the check Wilson issued to the insurance agency also
was returned for insufficient funds. Emails among Wilson, Capitol South, and the representative of
the insurance agency show only that Wilson attempted to pay for the insurance with cash, but that
the payment was refused and that she then issued the agency a check. Ex. 11. Regarding the
purported return of the check, Stefanik ambiguously testified that “we had received verification
after the fact that I believe a check was received.” Tr. I at 129. In other words, the evidence
shows only that “a check was received,” but does not establish that the check was returned for
insufficient funds. There also is no documentary evidence in the record establishing that the
insurance check was returned for insufficient funds.

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using the proceeds of another concert: “I said maybe if I do the next event, I will be able to
cover what I owe for the one that I just did.” Tr. II at 39; see also id. at 48, 53.
Rodriguez, who had lent Wilson $10,000 for expenses related to the Yandel concert, gave her a
cashier’s check in the amount of $25,000 about a week after the concert for the purpose of
producing a large-scale concert by the artist Daddy Yankee. Id. at 48–51, 56–60; Ex. 25. Wilson
deposited the check into her bank account and withdrew the funds in cash that same day. At some
point, she gave Rodriguez $10,000 of his own money back as payment for the $10,000 he had lent her
for the Yandel concert. Tr. II at 58. She then paid the remaining $15,000 that she received from
Rodriguez to the unidentified friend who had previously used a credit card to cover the costs of
airfare for Yandel and his team. Id. at 53, 58–59. Wilson did not advise Rodriguez that she was
going to use his $25,000 in this manner rather than for the Daddy Yankee concert. In other words,
she may have convinced Rodriguez to give her the $25,000 by misrepresenting how she was going to
use the money. But that does not mean that she misled Cabrera about the use of his money. To the
contrary, there is no evidence that she used the funds she received from Cabrera, Alvarez, or
Flores for anything other than the Yandel concert, and there is direct evidence that she in fact
used $16,000 of those funds to pay Live Nation for Yandel’s appearance.
Other than the income generated by sales of concert tickets and alcohol, sponsors were Wilson’s
only source of income in 2017. Tr. I at 20–21. She deposited that income into several bank accounts
and used the same accounts to pay both her business and personal expenses, including meals and
other daily living expenses. Tr. II at 67–68. Shortly after the concert, Wilson visited Miami with
Alvarez, who did not yet know that Wilson was unable to repay her and Cabrera. Tr. I at 147, 154;
Tr. II at 37. The expenses associated with the trip, however, were minimal. Wilson’s flight was
inexpensive, her mother paid for her ticket, and she stayed with a

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friend during the trip. Tr. I at 114; Tr. II at 37. At Alvarez’s suggestion, they took a day trip
from Miami to the Bahamas via ferry, but the ferry ticket cost only about $50, and Wilson’s only
other expense that day was $10 for lunch. Tr. II at 38. In an attempt to reestablish her “brand,”
Wilson also attended several fashion events in New York and Los Angeles to which she was invited
because of her prior involvement with Hola TV. Tr. I at 108–12; Tr. II at 34–36, 79–81. But all her
expenses were covered other than airfare, which was paid for by her mother. Tr. II at 35–36.
Although Wilson sometimes wore relatively expensive clothing during the fashion events, the clothes
were provided by her sponsors, and she typically was required to return them. Tr. I at 113; Tr. II
at 36–37.
A few weeks after the Yandel concert, Wilson contacted Cabrera and Alvarez to arrange a meeting.
Tr. I at 153. At the meeting, Wilson raised the idea of their providing funding for the concert she
hoped to promote next. Id. at 154. They declined to do so and inquired about the funds they had
expected to receive from the Yandel concert. Based on Wilson’s response, Cabrera’s understanding
was that he and Alvarez would only be receiving their initial $40,000 back. He also understood that
she would begin repaying them starting the next week and that she intended to use funds she
anticipated receiving from sponsors for the new concert she was planning. Id. at 154–55. Cabrera
contacted Wilson a few days later and, hoping to be able to confirm that any check she gave him
would be honored, asked her to meet him at Chase Bank before it closed. Id. at 155–56. Wilson
ultimately was late for the meeting and, once Cabrera reached her, asked to meet in the parking lot
of a Sam’s Club instead of at the bank. Id. at 157. Cabrera met her at the Sam’s Club after the
bank had closed, and Wilson gave him a check for
$25,000. Id. At the time Wilson gave Cabrera the check, she knew that the account on which it was
drawn lacked sufficient funds for the check to be honored. Id.at 120. It is even possible that

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she delayed meeting Cabrera and changed the meeting place so Cabrera could not determine that the
check would not be honored at that point. But no evidence was presented showing that Wilson
represented to Cabrera when she gave him the check that the account on which it was drawn contained
sufficient funds. And Wilson issued the check believing that she would be able to deposit new
sponsorship dollars into the account within the next few days so that the check would be honored:
“I was expecting the money to be there, because I was doing everything I could to organize—to come
up with the next event.” Id. at 120; see also Tr. II at 75–77. The sums she hoped to receive from
sponsors would have been for advertising at the next concert and thus were not funds that she would
have been required to repay. Tr. II at 78.
The concert that Wilson planned to produce in order to earn money to repay her debts from the
Yandel concert never happened. This was due at least in part to her inability to obtain sponsors
for the event. Id. at 26–27, 39, 78. For this Wilson blames comments made about her on social media
to the effect that she had engaged in fraud—negative publicity that began around the time she
issued the $25,000 check to Cabrera. Id. at 26–27, 78–79. Regardless of the reason, Wilson was no
longer able to generate income as a concert producer.
Cabrera sued Wilson in state court for $80,000 and obtained a default judgment against her. Tr. I
at 115; Tr. II at 7. Capitol South also obtained a default judgment against Wilson in an amount
exceeding $70,000 for treble damages plus attorneys’ fees. Ex. 10; Tr. I at 131–32.
A tax return was prepared on Wilson’s behalf in October 2018 for the calendar year ending December
31, 2017. Ex. 6. Apparently trying to call Wilson’s credibility into question, Capitol South
contends that Wilson “failed to declare at least $60,000 in income” on that return. Doc. 26 at 7.
In calculating that number, however, Capitol South included funds she was obligated to

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repay. But funds that must be repaid typically are not considered taxable income.4 Wilson was
obligated to repay the funds received from Cabrera regardless of the revenue generated by the
Yandel concert, and she demonstrated her intent to do so by testifying to her attempts to obtain
funds from sponsors that she would have used to repay Cabrera. Cabrera, of course, intended to seek
repayment. Thus, there is no basis to conclude that the income reflected on Wilson’s 2017 income
tax return was understated. Nor does the tax return call Wilson’s credibility into question for any
other reason.
Wilson filed her bankruptcy case in October 2018. As of the date of the filing, she was living with
her mother and making only about $1,000 a month as a server at a restaurant. Tr. I at

  1. She never recovered the approximately $5,000 of her own savings that she used to pay expenses
    related to the Yandel concert. Id. at 118–19, 154; Tr. II at 32, 40, 47–48, 60–61.
    D. Wilson’s Ability to Pay

In order to establish that Wilson had the ability to pay them, the plaintiffs submitted copies of
certain bank records through September 2017. Based on the records provided, an analysis of Wilson’s
total deposits and expenses reveals the following information: 5

4 See Milenbach v. Comm’r, 318 F.3d 924, 930 (9th Cir. 2003) (“A loan is generally not taxable
income because the receipt of the loan is offset by the obligation to repay the loan. For this rule
to apply . . . the loan must be an ‘existing, unconditional, and legally enforceable obligation for
the payment of a principal sum’ [and there also must be] ‘an unconditional obligation on the part
of the transferee to repay the money, and an unconditional intention on the part of the transferor
to secure repayment[.]’”) (citations omitted).
5 The data provided in this table is a compilation of all account deposits and debits (reflecting
payment of expenses by Wilson) over the time period covered by the bank account statements
introduced as exhibits by the plaintiffs.

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Account Total Deposits Total Withdrawals

8232 60,357.57 35,501.57

9769 40,071.74 32,389.22

0189 27,822.54 44,820.37

9683 2,950.00 2,800.00

2731 5,420.00 5,595.00

3298 2,008.66 40,317.30

Total $138,630.51 $161,423.46

The information summarized above incorporates all deposits and withdrawals reflected in

(i) the five bank accounts6 Wilson used for both her personal and business expenses and (ii) her
brother’s bank account7 insofar as the deposits to and withdrawals from that account relate to the
Yandel concert. As the chart reflects, over the course of several months leading up to and
following the Yandel concert, Wilson’s total expenses exceeded her total deposits by over $20,000.
Wilson’s ability to remain afloat despite this untenable financial situation was made possible only
by her banks’ willingness to cover a number of account overdrafts.
The chart does not list the cash obtained from ticket sales at the gate (“Gate Sales”) and amounts
paid in cash to various parties on the day of the concert (“Gate Expenses”). Wilson testified that
she used Gate Sales to pay the following Gate Expenses in cash on the day of the Yandel concert:
$3,500 for Yandel’s per diems; $1,000 for a disk jockey; $2,000 for security; and
$1,500 for bartenders. Because the Court knows from Wilson’s testimony that she paid Gate Expenses
using Gate Sales, the Gate Sales must have generated at least $8,000 in cash. While these amounts
are gleaned from Wilson’s testimony rather than from the bank accounts, they still must be added to
the total sums of Wilson’s deposits and expenses to convey a more accurate picture of her overall
financial position. Given the account information contained in the bank

6 Bank accounts ending in # 8232, # 9769, # 0189, # 9683 and # 2731.
7 Bank account ending in # 3298.

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statements—as well as the testimony regarding Gate Sales and Gate Expenses—the Court concludes that
she did not have the ability to pay Cabrera and Capitol South while also paying her other debts.
V. Legal Analysis

A. The Intent Requirement

To prevail on a nondischargeability complaint under § 523(a)(2)(A), a creditor must demonstrate
that the debtor intended to defraud the creditor, and to succeed under § 523(a)(6) the creditor
must show that the debtor intended to injure the creditor or the creditor’s property. See Duley v.
Thompson (In re Thompson), 528 B.R. 721, 740 (Bankr. S.D. Ohio 2015). The creditor must prove the
element of intent by a preponderance of the evidence. See Grogan v. Garner, 498 U.S. 279, 286
(1991). If the creditor fails to do so, then the other elements required to establish
nondischargeability under each subsection need not be addressed. See Rembert v. AT&T Universal Card
Servs., Inc. (In re Rembert), 141 F.3d 277, 283 (6th Cir. 1998). That is the case here. As
explained below, Cabrera and Capitol South have failed to prove by a preponderance of the evidence
that Wilson had the requisite intent—either to defraud or to injure—required to establish a basis
for nondischargeability under either § 523(a)(2)(A) or § 523(a)(6).
B. The Requirement of Intent Under § 523(a)(2)(A)

Section 523(a)(2)(A) provides as follows:

(a) A discharge under section 727 . . . does not discharge an individual debtor from any
debt—

(2) for money, property, services, or an extension, renewal, or refinancing of credit, to the
extent obtained by—

(A) false pretenses, a false representation, or actual fraud, other than a statement respecting the
debtor’s or an insider’s financial condition.

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11 U.S.C. § 523(a)(2)(A). Because § 523(a)(2)(A) is “phrased in the disjunctive,” a creditor need
only prove one of the “three distinct categories of debtor misconduct” to render a debt
nondischargeable: false representation, false pretenses, or actual fraud. Schafer v. Rapp (In re
Rapp), 375 B.R. 421, 433 (Bankr. S.D. Ohio 2007). A false representation involves an actual,
express misrepresentation. See id. False pretenses, on the other hand, involve implied
misrepresentations or conduct that attempts to create a false impression. See id. A debt arising
from a false representation or from false pretenses is nondischargeable if the creditor
establishes, among other things, that “the debtor intended to deceive the creditor.” Rembert, 141
F.3d at 280. Actual fraud more broadly consists of “any deceit, artifice, trick, or design
involving direct and active operation of the mind, used to circumvent and cheat another.” Mellon
Bank, N.A. v. Vitanovich (In re Vitanovich), 259 B.R. 873, 877 (B.A.P. 6th Cir. 2001) (quoting
McClellan v. Cantrell, 217 F.3d 890, 893 (7th Cir. 2000)). Although actual fraud does not
necessarily involve a representation, “wrongful intent” must exist for there to be a finding of
actual fraud. Husky Int’l Elecs., Inc. v. Ritz, 136 S. Ct. 1581, 1586 (2016).
In Rembert, the Sixth Circuit held in the context of a credit card transaction that “the
representation . . . is not that [the debtor] has an ability to repay the debt; it is that he has
an intention to repay.” Rembert, 141 F.3d at 281 (quoting Anastas v. Am. Sav. Bank (In re
Anastas),
94 F.3d 1280, 1285 (9th Cir. 1996)). Just so when a debtor enters into a contract—the
representation made by the debtor is that she intends to perform under the contract. And “the
appropriate time to measure the intent of a debtor not to perform a contract is at the moment of
its formation.” Webb v. Isaacson (In re Isaacson), 478 B.R. 763, 775 (Bankr. E.D. Va. 2012). That
is, the debtor’s “intent at the time the debt is incurred is critical in proving fraud.”
Vitanovich, 259 B.R. at 877.

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The standard for determining the debtor’s intent is subjective, and the issue therefore is “whether
the debtor subjectively intended to repay the debt.” Rembert, 141 F.3d at 281. A debtor who intends
to repay a debt using anticipated future income still has an intent to repay notwithstanding
significant uncertainty surrounding the receipt of the income. For example, the Sixth Circuit held
in Rembert that the debtor’s conduct “was entirely consistent with a subjective intent to repay”
even though her basis for believing she could repay her debts was her anticipation that she “would
win enough money” from gambling. Id. at 282. And the Sixth Circuit so held despite finding that the
debtor’s expectations likely were unreasonable: “The fact that Rembert later admitted that it
probably was not reasonable to believe that she would win enough money to repay . . . does not
indicate a subjective intent not to repay her debts in this case.” Id.; see also Hall v. Jackson
(In re Jackson), 348 B.R. 595, 599 (Bankr. M.D. Ga. 2006) (“A debtor’s honest belief that a debt
would be repaid in the future, even if in hindsight found to have been very unrealistic, negates
any fraudulent intent.”) (quoting 4 Collier on Bankruptcy ¶ 523.08[1][d] (15th ed. rev. 2006)).
Debtors, of course, “have an incentive to make self-serving statements and will rarely admit an
intent not to repay.” Rembert, 141 F.3d. at 282. Thus, a “debtor’s intention—or lack thereof— must
be ascertained by the totality of the circumstances.” Id. Among other things, a court may consider
events occurring after the debt was incurred. For although the intent to defraud must have existed
at the time the debt was incurred, “the debtor’s subsequent conduct may help to shed light on the
debtor’s state of mind at [that] time.” Risk v. Hunter (In re Hunter), 535 B.R. 203, 213 (Bankr.
N.D. Ohio 2015).
Of course, even if the debtor intended to repay the debt, grounds for nondischargeability will
still exist if the debtor misled the creditor in some other way. See In re Haden, No. C 98-3011

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FMS, 1998 WL 822997, at *3 (N.D. Cal. Nov. 17, 1998) (holding that the debtor obtained a loan
through fraud despite intending to repay the loan because the debtor “misrepresented the degree of
risk involved in lending the money”). Ultimately, for a debt to be held nondischargeable under
§ 523(a)(2)(A), the evidence taken collectively must “lead[] to the conclusion that it is more
probable than not that the debtor had requisite fraudulent intent.” Rembert, 141 F.3d at 282
(quoting Chase Manhattan Bank v. Murphy (In re Murphy), 190 B.R. 327, 334 (Bankr. N.D. Ill. 1995)).
C. The Requirement of Intent Under § 523(a)(6)

Under § 523(a)(6), an individual debtor is not discharged from any debt “for willful and malicious
injury by the debtor to another entity or the property of another entity.” 11 U.S.C.
§ 523(a)(6). For an injury to be “willful,” the debtor must have desired to cause the consequences
of her conduct or believed that the consequences were substantially certain to result from it. See
Markowitz v. Campbell (In re Markowitz), 190 F.3d 455, 464 (6th Cir. 1999) (citing Kawaauhau
v. Geiger, 523 U.S. 57, 61 (1998)). In other words, because the word “willful” modifies the word
“injury,” “nondischargeability takes a deliberate or intentional injury, not merely a deliberate or
intentional act that leads to injury.” Kawaauhau, 523 U.S. at 61.
D. Cabrera Has Not Shown That Wilson Intended to Defraud or Injure Him.

Having considered the totality of the circumstances, the Court finds by a preponderance of the
evidence that Wilson intended at the time she signed the Cabrera Agreement to comply with her
obligations under the agreement. Those obligations were threefold: (1) use the $40,000 she received
under the Cabrera Agreement for the Yandel concert; (2) return the $40,000 after the concert; and
(3) pay Cabrera and Alvarez “50% of all revenue after expenses,” which was estimated to be an
additional $40,000. Ex. 20. The representation that Wilson made when she signed the Cabrera
Agreement was that she would do all that, and the evidence establishes that she

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intended to do so. Indeed, she used the funds contributed by Cabrera to pay a portion of Yandel’s
appearance fee, and she failed to return his money only because she ultimately was unable to do so.
She would have known that failing to honor her obligations to Cabrera would tarnish her reputation
in the Hispanic community, thereby hindering her goals of becoming an entrepreneur who served that
community. Given all this, it is unlikely that Wilson entered into the Cabrera Agreement intending
not to keep her promises.
Cabrera makes several arguments against this commonsense conclusion, none of them convincing. He
first contends that Wilson’s description of his funding as an “investment” means that she did not
intend to repay him. Cabrera Proposed Findings (Doc. 22 in Adv. Pro. No. 18- 2155) at 15–18. This
argument is not well taken. The evidence shows that Wilson intended to return the funds she
received from Cabrera regardless of the outcome of the Yandel concert. Indeed, despite the
financial failure of the concert, she advised Cabrera that she would repay him using the
sponsorship funds that she hoped to receive in the future. The only reason she did not repay him is
that her sponsors declined to fund a future concert promoted by Wilson after she began receiving
negative publicity as a result of the failed Yandel concert.
Moreover, there is simply no evidence that Cabrera, who himself described his deal with Wilson as
an investment, Tr. II at 10, was led to believe that he would double his money regardless of the
amount of net profits Wilson derived from the Yandel concert. Under the terms of the Cabrera
Agreement, which expressly states that it is an “investment agreement,” Wilson agreed to pay
Cabrera and the others “50% of all revenue after expenses,” estimated to be $40,000. Ex. 20. And
there is no evidence that Wilson represented to Cabrera either expressly or impliedly that she
would pay that $40,000 using a source of funds other than the “revenue after expenses” from the
Yandel concert. The fact that Wilson chose to pay other creditors and not Cabrera in no way

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indicates that she did not intend to pay him half of the concert’s net revenue. After all, the
amount equal to 50% of revenue after expenses could have been calculated only after Wilson paid all
her other expenses associated with the concert. Finally, although it turned out that Wilson was not
up to the task of bringing in the number of concertgoers needed to generate the net revenue she and
Cabrera expected, there is no evidence that she failed to put forth her best efforts. To the
contrary, having invested about $5,000 of her own money—and with her reputation on the line—she
undertook every effort she knew to take in order to make the Yandel concert a success. Although her
expectations for the Yandel concert proved to be unrealistic, they were no more unreasonable than
those of the gambler in Rembert.
Cabrera next argues that Wilson used a “classic scammer technique” to defraud him through false
pretenses. Cabrera Proposed Findings at 16. He points to their frequent meetings, their mutual
introductions to family members, Wilson’s use of a term of endearment for him, the prior borrowings
she timely repaid, and her urgent request for money to fund the Yandel concert. Id. at 13–15.
Whatever that was, none of it amounts to false pretenses, false representation, or actual fraud
under the circumstances of this case. Wilson was confident that the Yandel concert would be
successful enough to not only repay Cabrera but also to double his money, and she did not mislead
Cabrera about the degree of risk involved or anything else related to the concert. Cabrera
testified that Wilson told him and Alvarez that “she would need between 1,500 to 2,000 in order for
us to come out with gains.” Tr. I at 153. That range is curiously close to the number Cabrera
estimates actually attended the concert, and in light of Wilson’s belief that the Yandel concert
would draw at least 5,000 concertgoers, it seems unlikely that she would have so advised Cabrera.
And even if Cabrera’s recollection in this regard is accurate, his testimony would establish only
that Wilson believed that he would have some gains if the concertgoers numbered

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1,5000 to 2,000, not that she told him that he would double his money at that crowd size. Because
Wilson did not mislead Cabrera about the risk involved, and given that Wilson always intended to
fulfill her obligations to Cabrera, her efforts to persuade him to fund the concert did not
constitute false pretenses or any other form of fraud.
Trying a different tack, Cabrera contends that Wilson exhibited fraudulent intent when she
attempted to repay him using a $25,000 check drawn on an account that she knew did not yet contain
sufficient funds to cover it. Cabrera Proposed Findings at 11–13. It is well established, however,
that the issuance of a check in and of itself is not a representation that the account on which it
is drawn contains sufficient funds for the check to be honored. See Williams v. United States, 458
U.S. 279, 284 (1982); Stewart v. E. Tenn. Title Ins. Agency, Inc. (In re Union Sec. Mortg. Co.), 25
F.3d 338, 341 (6th Cir. 1994) (“Since a check does not make any representation, it cannot make any
misrepresentation.”). Furthermore, because the issuance of a check does not involve a
representation, it also does not constitute a false pretense. See Goldberg Sec., Inc. v. Scarlata
(In re Scarlata), 979 F.2d 521, 524–25 (7th Cir. 1992) (holding that the issuance of a bad check
does not establish that the issuer engaged in false pretenses).
To establish a false representation or pretense in this context, Cabrera would need to show that
Wilson represented to him that funds were available in her account to satisfy the check. See 119th
& Halsted Currency Exch. v. Blake-Ware (In re Blake-Ware), 155 B.R. 476, 477 (Bankr.
N.D. Ill. 1993) (holding that the debtor had made a false representation for purposes
of

§ 523(a)(2)(A) by answering in the affirmative when the creditor asked her if funds were available
in her account). But there is no evidence that Wilson represented at the time she issued the check
that the account on which it was drawn contained sufficient funds. Also, Wilson, who had received
tens of thousands of dollars from sponsors in exchange for advertising in connection with the

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Yandel concert, gave Cabrera the $25,000 check anticipating that she would soon receive funds for
her next concert from companies that had previously provided her with sponsorship dollars, and she
planned to deposit those funds into her account so that the check would be honored.
According to Cabrera, Wilson’s plans to pay him using funds she anticipated receiving from
sponsors, as well as her use of Rodriguez’s $25,000 to pay other creditors, means that Wilson was
engaging in a Ponzi scheme. Cabrera Proposed Findings at 13, 16. This argument misses the mark. A
Ponzi scheme is a “fraudulent investment arrangement under which an entity makes payments to
investors from monies received from new investors rather than from profits generated by legitimate
business operations.” Rieser v. Hayslip (In re Canyon Sys. Corp.), 343 B.R. 615, 629 (Bankr. S.D.
Ohio 2006). But Wilson’s corporate sponsors were not investors; they provided her funds in exchange
for advertising, not to be repaid. And although Wilson used Rodriguez’s money to pay back earlier
creditors (including Rodriguez himself), there is no evidence that she used the funds received from
Cabrera to pay creditors from an earlier event or for anything else other than expenses related to
the Yandel concert.
Cabrera also relies on what he describes as Wilson’s “record of costly spending,” including
traveling “luxuriously and internationally,” to argue that Wilson did not intend to repay him.
Cabrera Proposed Findings at 9. Here, Cabrera misconstrues the record. Besides paying for meals and
other daily living expenses, all Wilson did was take several trips within the United States and a
single day trip to the Bahamas. Most of the expenses were paid for by her mother or her fashion
sponsors, and the expenses that Wilson herself paid were minimal. In short, Wilson’s post-concert
personal expenditures may well have been ill advised. But they were not so extravagant as to
suggest that Wilson lacked the intent to repay her debts at the time she incurred them. In light of
all the foregoing, the Court finds by a preponderance of the evidence that the debt Wilson incurred

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when she signed the Cabrera Agreement did not arise from false pretenses, false representation, or
actual fraud.
Cabrera refers to § 523(a)(6) in passing, and in cursory fashion he suggests that Wilson would have
had a “substantial certainty” that her actions would injure him. Cabrera Proposed Findings at 2, 6,

  1. Under § 523(a)(6), an individual debtor is not discharged from any debt “for willful and
    malicious injury by the debtor to another entity or the property of another entity.” 11 U.S.C. §
    523(a)(6). In order to conclude that Wilson willfully injured Cabrera, the Court would need to find
    that she intended to injure him or that she was substantially certain that her actions would cause
    him injury. But such a finding is not warranted here. To the contrary, the evidence shows that
    Wilson intended to comply with the Cabrera Agreement. Her prior experience producing concerts, her
    research suggesting a Yandel concert would draw 5,000 concertgoers in Columbus, and her success in
    obtaining thousands of dollars of sponsorship funds, together gave her good reason to believe that
    she could fulfill her obligations under the Cabrera Agreement. The Court therefore cannot find that
    Wilson intended to injure Cabrera or that she was substantially certain that her conduct would do
    so.
    E. Capitol South Also Has Failed to Establish Wilson’s Fraudulent Intent.

Having considered the totality of the circumstances, the Court finds by a preponderance of the
evidence that Wilson intended at the time she signed the Capitol South Agreement to comply with her
obligations under the agreement. Indeed, Capitol South does not even argue that Wilson lacked the
intent to fulfill her obligations at the time she entered into the agreement. Instead, Capitol
South focuses on the moment four months later when Wilson issued it a check that ultimately was
returned for insufficient funds, and it also points to her issuance of a check for insurance
coverage that also was allegedly returned for insufficient funds. Capitol South Proposed Findings
(Doc. 26 in Adv. Pro. No. 19-2013) at 11–12. As already discussed in connection with

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the arguments made by Cabrera, the issuance of a check is not a representation that the account on
which it is drawn contains sufficient funds for the check to be honored, and the issuance of a
check alone therefore does not constitute false pretenses or a false representation. Again, to have
any chance of prevailing in this context, Capitol South needed to show that Wilson represented to
it that funds were available in her account sufficient for the check to be honored at the moment
she issued it. There is, however, no evidence that Wilson expressly or impliedly made any such
representation to Capitol South, nor is there evidence that Wilson misled Capitol South in any
other way. Further, Wilson issued the check to Capitol South anticipating that the proceeds of
ticket sales at the gate would allow her to deposit the funds needed to cover the check after the
Yandel concert. With respect to the check Wilson issued to the insurance agency, there is no
testimonial or documentary evidence establishing that it in fact was returned for insufficient
funds. For all these reasons, neither the issuance of the check to Capitol South nor the issuance
of the check to the insurance agency provides a basis for declaring Wilson’s debt to Capitol South
nondischargeable.
Capitol South tries to make out a case of actual fraud based on its allegations that Wilson

(1) deposited Eventbrite proceeds into her brother’s account, (2) failed to deposit a purported

$20,000 of Gate Sales into her own accounts, (3) used Rodriguez’s $25,000 to pay back a friend and
Rodriguez himself but not Capitol South, and (4) filed an allegedly fraudulent 2017 federal tax
return. Capitol South Proposed Findings at 12–13. Most of this is inaccurate, and none of it
demonstrates that Wilson engaged in actual fraud as to Capitol South. As the Court found above,
Wilson permitted funds to be deposited into an account maintained by her brother so that he could
take care of the logistics of paying certain expenses related to the Yandel concert. As to the
$20,000 of alleged Gate Sales, there is no evidence that the Yandel concert produced anywhere

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    near that amount of gross—let alone net—proceeds. Wilson’s decision to use Rodriguez’s $25,000

to repay Rodriguez and an unnamed friend the amounts she owed them from the Yandel concert do not
amount to fraud as to Capitol South. Finally, because the plaintiffs failed to establish that
Wilson understated her income on her 2017 federal tax return, the return provides no reason to
question Wilson’s credibility.
VI. Conclusion
For the foregoing reasons, the Court concludes that Wilson is entitled to a judgment in her favor
providing that her debts to Cabrera and Capitol South are not excepted from discharge under either
§ 523(a)(2)(a) or § 523(a)(6) of the Bankruptcy Code. A judgment in accordance with this opinion
will be entered separately.
IT IS SO ORDERED.
Copies to:
Joshua J. Brown, Attorney for Plaintiff Jose Cabrera (electronically)
James H. Gordon, Attorney for Plaintiff Capitol South Urban Redevelopment Corporation
(electronically)
Steven D. Sundberg, Attorney for Defendant Nashely Wilson (electronically)
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