What happens when a creditor who is owed a non-dischargeable debt (such as a fraud judgment) receives a payment during the preference period and later has to return the voidable preference to the estate?  May the creditor seek an exception to discharge for the amount of the voided preference?  According to the Ninth Circuit BAP, the answer may be "no."

The Sheppard Mullin Blog discusses this case in an article:  Return Of Preferential Payment Arising From Fraud Settlement Does Not Revive Creditor’s Nondischargeability Claim.