Melton

In Grogan v. Garner, — U.S.-, 111 S.Ct. 654, 661 , 112 L.Ed.2d 755 (1991), the Supreme Court held that the standard of proof for the dischargeability exceptions contained in section 523(a) of the Bankruptcy Code is the ordinary preponderance of the evidence standard, rather than the clear and convincing standard. In this appeal, we decide whether we should apply the preponderance of the evidence standard retroactively.

We have jurisdiction under 28 U.S.C. § 158 (d). We hold that the Supreme Court’s decision in James B. Beam Distilling Co. v. Georgia, — U.S. -, 111 S.Ct. 2439 , 115 L.Ed.2d 481 (1991) (Jim Beam) requires retroactive application of the Gro-gan rule in this case. Accordingly, we remand this case to the district court for remand to the bankruptcy court for further proceedings.

FACTS

Perry S. Griggs induced Floyd Randall Moore to participate with him in a used telephone systems business to be known as “Intertel.” Moore was to solicit money from investors and Griggs was to use the money to buy telephone systems and operate the business. Moore raised the money, but Griggs kept it for himself, except to the extent he used investors’ funds to create the illusion of an…