523(a)(7)
Posted: Thu Jan 04, 2018 2:22 pm
Has anyone dealt with 523(a)(7)?
We are about to file a chapter 11, and debtor received a 3rd party
complaint from a county alleging negligence and asking for indemnification
AND restitution IF the county (who is the defendant) is found liable.
I don't know under what theory the debtor would be liable for civil
"restitution" as opposed to indemnification. This has to do with a
construction contract.
The case law under 523(a)(7) says that to be nondischargeable, the money
has to be owed to a governmental unit AND not be fore actual pecuniary
loss. Indemnification sounds like actual pecuniary loss, but "restitution"
does not.
Under what circumstances would the County be entitled to "restitution" for
a negligence construction case? Is there something special about Counties
and their contracts with corporations that would allow them to recover
"restitution" in such a situation instead of just indemnification?
Holly Roark
Certified Bankruptcy Specialist*
*and Sports Lawyer*
holly@roarklawoffices.com **primary email address**
www.roarklawoffices.com
*Central District of California & District of Idaho* - Consumer Bankruptcy
Attorney
1875 Century Park East, Suite 600 Los Angeles, CA 90067
T (310) 553-2600; F (310) 553-2601
*By State Bar of California Board of Legal Specialization
Has anyone dealt with 523(a)(7)?We are about to file a chapter 11, and debtor received a 3rd party complaint from a county alleging negligence and asking for indemnification AND restitution IF the county (who is the defendant) is found liable.I don't know under what theory the debtor would be liable for civil "restitution" as opposed to indemnification. This has to do with a construction contract.The case law under 523(a)(7) says that to be nondischargeable, the money has to be owed to a governmental unit AND not be fore actual pecuniary loss. Indemnification sounds like actual pecuniary loss, but "restitution" does not.Under what circumstances would the County be entitled to "restitution" for a negligence construction case? Is there something special about Counties and their contracts with corporations that would allow them to recover "restitution" in such a situation instead of just indemnification?Holly RoarkCertified Bankruptcy Specialist*and Sports Lawyer
holly@roarklawoffices.com**primary email address**
www.roarklawoffices.com
Central District of California & District of Idaho - Consumer Bankruptcy Attorney
1875 Century Park East, Suite 600 Los Angeles, CA 90067T (310) 553-2600; F (310) 553-2601
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