## Facts

- Creator’s Way Associated Labels, Inc. entered into an exclusive recording agreement with Carl T. Mitchell, professionally known as “Twista” (Mitchell).
- Under the agreement, Mitchell was obligated to record and deliver one album to Creator’s Way.
- Creator’s Way held options to extend the agreement for up to six consecutive periods, with each extension requiring Mitchell to record and deliver an additional album during that period.
- Mitchell agreed to record exclusively for Creator’s Way during the term of the agreement.
- The contract stated that Mitchell’s services were “unique and extraordinary,” that damages would be inadequate, and that Creator’s Way would be entitled to injunctive relief to enforce the exclusivity provisions.
- The agreement’s term continued until Mitchell completed his performance (i.e., until he recorded and delivered the required album(s)).
- Mitchell later filed for Chapter 7 bankruptcy and refused to continue performing under the recording agreement.
- Creator’s Way and LB Entertainment commenced an adversary proceeding seeking a declaration that Mitchell’s exclusive-performance obligations were not discharged and could still be enforced through injunctive relief.

## Issues

1. Whether the plaintiffs’ right to obtain an injunction enforcing Mitchell’s exclusive personal-services obligations was a “claim” under 11 U.S.C. § 101(5)(B) because a breach would “give[] rise to a right to payment.”
2. If the injunction right was a “claim,” whether it was subject to discharge in Mitchell’s Chapter 7 case.
3. Whether contractual language describing services as “unique and extraordinary” and stating damages are inadequate prevents the injunction right from being treated as a dischargeable claim.

## Decision

- The court held that the plaintiffs’ right to enforce the exclusivity provisions by injunction was a “claim” under 11 U.S.C. § 101(5)(B) because the alleged breach could be addressed through an alternative remedy in money damages.
- Because the right to injunctive relief qualified as a dischargeable claim, it could not survive bankruptcy as a post-discharge restraint on Mitchell’s ability to record for others.
- The plaintiffs were limited to pursuing a monetary claim (to the extent available under bankruptcy law) rather than compelling or restraining Mitchell’s post-discharge conduct by injunction.

## Legal Principles

- Under 11 U.S.C. § 101(5)(B), a “claim” includes a right to an equitable remedy for breach of performance if the breach gives rise to a right to payment.
- An injunction (or other equitable relief) “gives rise to a right to payment” when money damages provide an alternative remedy for the same asserted injury; in that event, the equitable remedy is treated as a claim in bankruptcy.
- Whether an equitable remedy is a “claim” turns on the substance of the available remedies under applicable nonbankruptcy law, not on how the contract labels the services or the requested relief.
- Contract provisions stating that services are unique or that damages are inadequate may be considered, but they do not control the Bankruptcy Code’s definition of “claim” when a monetary substitute is available.
- Bankruptcy discharge bars creditors from using equitable remedies to collect or enforce discharged obligations when those remedies are effectively a substitute for payment.

## Conclusion

In In re: Carl T. Mitchell (Twista), the bankruptcy court treated the record label’s requested injunction enforcing an exclusive recording agreement as a dischargeable “claim” because the alleged breach could be compensated through money damages, leaving the plaintiffs to monetary remedies rather than post-discharge injunctive enforcement.


In re: Carl T. Mitchell, P/K/A Twista Creator's Way Associated Labels, Inc. v. LB Entertainment, 249 B.R. 55 (2000)