Siriani
Siriani v. Northwestern National Insurance (In re Siriani)
Opinion
Lead Opinion
Fletcher, J.
Bruce L. Siriani, Mark W. Stevens and Philip J. Andrews (the “debtors”) appeal the decision of the Bankruptcy Appellate Panel (“BAP”) reversing the bankruptcy court’s decision that their debt to North *303 western National Insurance Company (“Northwestern”) was dischargeable. The BAP found the debt was nondischargeable under 11 U.S.C. 523(a)(2)(B). We affirm.
FACTS
In November, 1983, a limited partnership formed by the debtors and another individual purchased an apartment building in Dallas. A $1.2 million loan from Spring-brook Lenders (“Springbrook”) partially financed the purchase. The loan was due on September 15, 1985; the debtors expected to sell enough limited partnership interests to pay it off.
As a condition of the loan, Springbrook required the debtors to obtain a financial guaranty bond. Northwestern agreed to issue the bond, provided the debtors agreed to indemnify Northwestern for any sums it had to pay Springbrook. Under the indemnity agreement, should a claim be made on the bond, Northwestern required the debtors to deposit funds with Northwestern in the amount of the claim. In addition, the indemnity agreement gave Northwestern security interests in the…