Abstract
Over the years, both state and the federal governments have created technical or statutory trusts to protect creditors in numerous situations, including the federal Perishable Agricultural Commodities Act, state builders' trust acts and other statutes protecting intended recipients from nonpayment. Creditors rely on these statutorily imposed trusts, assuming that the failure to pay creates a trust claim that would be elevated above other creditors, including those holding security interests in inventory, accounts receivable or proceeds. Once a statutory trust intersects with the Bankruptcy Code, this reliance can be disturbed by courts determining that the relationship, even though called a "trust," does not amount to a fiduciary relationship or that the failure to pay is not defalcation. As a result, the claim is dischargeable in spite of the language contained in Section 523(a)(4) of the Code.