Plaintiff credit union filed an adversary complaint against debtor, its former president and treasurer, seeking non-dischargeability of its debt under 11 U.S.C. § 523(a)(2), (a)(4), and (a)(6). After trial, the court dismissed the complaint. Plaintiff filed a motion for new trial, which the court denied, electing instead to amend its previous ruling. The court had previously found that debtor was a fiduciary to plaintiff under state law, and that he owed the amount of the pending claim based on various failures to meet his obligations to plaintiff. However, the court had found that plaintiff's claim was still dischargeable under § 523(a)(4) because plaintiff had not proven that defendant's conduct constituted "fraud or defalcation" under that provision. On the motion for new trial, however, the court concluded that defalcation by a fiduciary under § 523(a)(4) includes failure to account for funds entrusted to the fiduciary, even if only negligent, innocent, or ignorant. Since debtor had breached several of the duties he owed to plaintiff as its president and treasurer, his conduct satisfied the defalcation element of § 523(a)(4), and plaintiff's claim was held to be non-dischargeable under that provision. This decision was reversed by the district court in 245.pdf.