June 4, 2017
- Debtor was convicted of stealing money from his employers.
- Restitution was set at $196,691.
- Debtor filed for Chapter 7 Bankruptcy.
- Employer filed an adversary proceeding since the Debtor was trying to discharge the restitution obligation.
- The Debtor admitted he was charged with and pleaded guilty to criminal theft and ordered to pay restitution.
- Debtor denied that the Restitution Order was non-dischargeable.
- Debtor appealed Bankruptcy Court’s ruling that the debt was non-dischargeable.
Appellate Court Ruling
- Bankruptcy courts should not invalidate the results of state criminal proceedings.
- The Restitution Order focused on punishment and rehabilitation and is clearly within the meaning of Section 523(a) (7) of the Bankruptcy Code.
- RESTITUTION ORDER WAS NOT DISCHARGEABLE.