In Kovacs' chapter 7 case, the State of Ohio sought a judgment from the bankruptcy court declaring the pre-petition injunction non-dischargeable.
It is clear that Maggio is entitled only to limited relief from the discharge injunction in order to pursue injunctive relief in state court.
While the Supreme Court was careful to limit its ruling to the facts of that case, several courts have interpreted Kovacs as holding that a claim on a chapter 7 debtor's breach of a covenant not to compete is dischargeable where compliance requires the expenditure of money but if, on the other hand, compliance with the covenant requires nothing more of the debtor than to refrain from conduct, then the covenant is not a debt or claim subject to discharge.
The Court is cognizant that if the Debtor is enjoined in state court from the practice of chiropractic pursuant to the terms of the covenant, that costs incidental to the Debtor's re-establishment of a chiropractic practice elsewhere may result.
Philip has a background as a chartered accountant and management consultant with 20 years senior experience within the financial services sector.