In Re Walter C. Leadbetter, Debtor,marvin A. Sicherman, Appellee, v. Ohio Public Employees Deferred Compensation Program, Appellant, 946 F.2d 895 (6th Cir. 1991)

Defendant Ohio Public Employees Deferred Compensation System ("the Ohio Program") appeals from the district court's decision enforcing a turnover order issued on March 1, 1990 by the United States Bankruptcy Court for the Northern District of Ohio. The bankruptcy court ordered the debtor, Walter C. Leadbetter, to turn over to the trustee certain funds deferred by the debtor under the Ohio Program. The United States District Court for the Northern District of Ohio affirmed the bankruptcy court's order. This appeal followed.

Having carefully considered the arguments of counsel, and the briefs and joint appendix filed by the parties, we are unable to say that the district court erred in ordering the deferred funds to be included in the bankruptcy estate. The Ohio Program fears that it might lose its tax exempt status under 26 U.S.C. § 457. We see no merit in this claim. Appellant also argues that pursuant to 26 U.S.C. § 457 the deferred funds are not the property of the debtor. This provision merely establishes that the debtor has no taxable interest in the deferred funds. It does not indicate whether he has a property interest for the purposes of the bankruptcy code. Thus, we find no tension between the tax code, 26 U.S.C. § 457, and the bankruptcy code, 11 U.S.C. § 541(a) (1). For the reasons stated by the bankruptcy court in its opinion of March 1, 1990, and adopted by the district court in its opinion of November 30, 1990, as amended on December 5, 1990, we agree that the deferred funds are the property of the bankruptcy estate. We therefore AFFIRM the order of the district court.