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IN RE PHILLIPS

Nos. 88-2378, 88-2495, 88-2616 and 88-2692.

882 F.2d 302 (1989)

In re Lloyd PHILLIPS. FIRST NATIONAL BANK OF FAYETTEVILLE, ARKANSAS, Appellee/Cross-Appellant, v. Lloyd PHILLIPS, Appellant/Cross-Appellee. In re Stanley SISEMORE, Debtor. FIRST NATIONAL BANK OF FAYETTEVILLE, ARKANSAS, Appellee/Cross-Appellant, v. Stanley L. SISEMORE, Appellant/Cross-Appellee.

United States Court of Appeals, Eighth Circuit.

Decided August 8, 1989.

Attorney(s) appearing for the Case

Stephen L. Taylor, Springdale, Ark., for appellant/cross-appellee.

Mark Lindsay, Fayetteville, Ark., for appellee/cross-appellant.

Before BEAM, Circuit Judge, HEANEY, Senior Circuit Judge, and HANSON, District Judge.

BEAM, Circuit Judge.

These appeals were consolidated for purposes of this opinion. Lloyd Phillips and Stanley Sisemore (debtors) appeal from an order of the district court affirming the bankruptcy court's determination that a debt owed by the debtors resulted from embezzlement and thus was nondischargeable under 11 U.S.C. § 523(a)(4) (1982). We reverse and remand.

I. Background

The debtors were officers and shareholders of Midwest Poultry Equipment...

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