Jump to Navigation
Jump to Content

In re In re Kovacs

Citation: 14 ELR 20253
No. No. 82-3629, 717 F.2d 984/20 ERC 2194/(6th Cir., 09/22/1983)

The court rules that a judgment entry requiring Kovacs to clean up hazardous wastes at the Chem-Dyne Corp. site is dischargeable in bankruptcy. The court rejects the State of Ohio's argument that the judgment directing Kovacs to remove the wastes from the site is nondischargeable since it is neither a right to payment nor a right to an equitable remedy for breach of performance with an alternative right to payment. The court finds that the state's attempts to enforce the judgment are indistinguishable from attempts to enforce an alternative right to payment. Though Ohio claims there is no alternative right to payment, upon Kovacs' failure to meet the cleanup schedule the state appointed a receiver to control Kovacs' assets and apparently attempted to levy on Kovacs' post-bankruptcy petition earnings. The court holds that Ohio is essentially seeking a money payment from Kovacs. The court indicates that if the state had instead levied a money penalty against Kovacs, the penalty might have been nondischargeable under § 523 of the Bankruptcy Reform Act.

Counsel for Appellants
E. Dennis Muchnicki, Ass't Attorney General
Environmental Law Section
30 E. Broad St., Columbus OH 43215
(614) 466-4320

Counsel for Appellees
Steve Williams, William H. Eder Jr.
Wood, Lamping, Slutz & Reckman
800-900 Tri-State Bldg., Cincinnati OH 45202
(513) 852-6000

E. Hanlin Bavely
Kelley, Grossman & Bavely
432 Walnut St., Cincinnati OH 45215
(513) 621-0550

Before KENNEDY and WELLFORD, Circuit Judges, and McRAE, District Judge.*