Court of Appeals for the Fifth Circuit March 16, 1990, 89-2714 (In the Matter of Alden D. Holford, Debtor. Alden D. Holford v. Melvin Lane Powers A/K/A Mel Powers and Mel Powers D/B/A Mel Powers Investment Builder)

GARZA, Circuit Judge:

Alden Holford appeals contempt penalties imposed against him for violation of the automatic stay in Powers’ bankruptcy proceeding when he offset rents due against damages in a state court fraud claim. Because we find that his actions constituted a recoupment and not a setoff, we REVERSE the contempt holding.

FACTS

In March of 1982, a Vice-President of M.