Vojislav Sesum, 662 B.R. 840

Squarepoint Ops, LLC, an asset management firm, sued its former employee, Vojislav Sesum, after an arbitration concluded Sesum had misappropriated a trading strategy and code.
The arbitration awarded Squarepoint damages, disgorgement of profits, and injunctive relief preventing Sesum from using or disclosing the strategy, plus ordered Sesum to inform his new employer, Millennium, of his obligations.
Following these proceedings, Sesum filed for Chapter 7 bankruptcy in the U.S. Bankruptcy Court, S.D.N.Y.
Squarepoint sought a determination that the debt owed (damages, disgorged profits) under the arbitration award was non-dischargeable under 11 U.S.C. § 523(a)(4) (embezzlement) and § 523(a)(6) (willful and malicious injury).
The case also analyzed whether the injunction awarded amounted to a dischargeable “claim” under Bankruptcy Code § 101(5)(B).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Is the strategy/code property under NY law for embezzlement (523(a)(4))?	Strategy is intangible property with physical elements (e.g., code/files); qualifies as property.	Sesum took only ideas/knowledge, not physical or tangible property.	Court: Not property; plaintiff failed to prove tangible form or physical appropriation.
Was Sesum's conduct fraudulent (embezzlement, 523(a)(4))?	Sesum's concealment and deletion showed deceit and fraudulent intent.	No fraudulent intent; conduct motivated by career/economic reasons, not fraud.	Court: Insufficient evidence of fraudulent intent; element not met.
Was there willful and malicious injury (523(a)(6))?	Sesum acted to harm Squarepoint by taking and using the strategy at Millennium.	Conduct was not willful or malicious; intent was to advance own career.	Court: No willful injury; defendant’s motives were personal gain, not harm.
Does the injunctive relief constitute a dischargeable claim?	Injunction is not a claim seeking payment, but equitable relief.	Injunction could lead to money damages and is thus a claim.	Court: Not a claim; injunction imposes duties, not rights to payment, thus not dischargeable.

Thyroff v. Nationwide Mut. Ins. Co., 8 N.Y.3d 283 (N.Y. 2007) (electronic data can qualify as property if it is indistinguishable from physical documents)
People v. Aleynikov, 31 N.Y.3d 383 (N.Y. 2018) (source code is property when copied onto a tangible medium)
Ohio v. Kovacs, 469 U.S. 274 (1985) (injunction is a claim when it converts to a right to payment)
In re Chateaugay Corp., 944 F.2d 997 (2d Cir. 1991) (injunctive relief is a claim only if it is an alternative to a right to payment)
Kawaauhau v. Geiger, 523 U.S. 57 (1998) (willful injury under 523(a)(6) requires deliberate or intentional injury, not just intentional act leading to injury)