Pet food shop owner Mark Poveromo was ordered by a Connecticut bankruptcy judge to repay money collected in a judgment against construction company owner Mark R. Koch.
In 2006, Poveromo hired Mark R. Koch to construct a building for his pet food business for $80,000. Poveromo paid $39,500 up front, but Koch never did any work, according to court documents. Poveromo filed a criminal complaint, and Koch was convicted of first-degree larceny and ordered to pay restitution. Koch paid $25,000 and began monthly payments to Poveromo on the balance, but two months before his larceny conviction, Koch had filed for bankruptcy protection in St. Louis, halting any monetary claims against him. Koch stopped payments and
Poveromo had him arrested but later claimed he did not receive the bankruptcy notices. Because of the arrest, Koch filed a complaint with bankruptcy court accusing Poveromo of intentionally violating the stay on claims by having him arrested to collect on the debt.
The bankruptcy judge Rendlen ruled in Koch's favor ordering Poveromo to pay back the payments Koch had given him as well as attorney's fees and costs. "Allowing a creditor to use the threat of incarceration on charges related to a prepetition debt undermines the most fundamental premise of bankruptcy law: the guarantee of equal treatment among creditors pursuant to the bankruptcy code," Rendlen wrote.