Posted by NCBRC - August 23rd, 2017
The debtor’s anticipated bonus was not part of the bankruptcy estate where its issuance was discretionary and the employee had no enforceable interest in it at the time of the petition. In re Bronikowski, No. 16-50719 (Bankr. W.D. N.C. June 16, 2017).
Vincent and Lisa Bronikowski filed a chapter 7 petition in November, 2016. In their schedules, Ms. Bronikowski listed, and claimed an exemption for, an anticipated bonus from her employer for the 2016 year. Ms. Bronikowski’s employee handbook provided that the employer had “full and final discretionary authority to interpret and administer the Plan as well as determine the amount, if any, and payment of all incentive bonuses, awards and other compensation pursuant to the Plan.” The trustee objected to the exemption. The Bronikowskis amended their schedules asserting that the anticipated bonus should not be deemed property of the bankruptcy estate. Read More
Posted by NCBRC - August 10th, 2017
Where the chapter 13 debtor failed to redeem property sold in a tax sale within the time period laid out in section 108(b)(2), the tax purchaser had an ownership interest in the property rather than a lien and was, therefore, entitled to relief from stay to take possession. In re Millington, No. 17-31290 (Bankr. S.D. Tex. Aug. 8, 2017).
Derron Millington filed for chapter 13 bankruptcy three days before expiration of the Texas deadline for redeeming property sold through tax foreclosure. When he failed to redeem after filing his petition, Gulf States, the tax purchaser, moved for relief from stay. Read More
Posted by NCBRC - July 28th, 2017
Where the debtor did not discover the injury giving rise to a medical product liability class action suit until after her bankruptcy was closed, the settlement proceeds from that cause of action were not property of the estate even though the debtor underwent the medical procedure while the bankruptcy was still pending. In re Purcell, No. 08-40224 (Bankr. D. Kan. July 19, 2017). Read More
Posted by NCBRC - July 17th, 2017
The debtors were “parties in interest” for purposes of establishing standing to compel abandonment of their residential property. Jahn v. Burke (In re Burke), No. 16-6603 (6th Cir. July 14, 2017).
After Philip and Nekolia Burke filed chapter 7 bankruptcy, the trustee sought to evict them from their residence and sell the property for the benefit of creditors. The trustee tendered a check to the Burkes representing their homestead exemption. The Burkes refused the money and moved to compel the trustee to abandon the property as being of inconsequential value to the bankruptcy estate. In the alternative, the Burkes moved to convert to chapter 13. At the evidentiary hearing, the parties offered competing valuations with the Burkes presenting testimony of two appraisers that the residence had a value of approximately $108,000 and was security for a mortgage in the amount of $91,581. The trustee countered with the testimony of a realtor, a home inspector and himself that the value was approximately $200.000. The bankruptcy court resolved the valuation issue in favor of the Burkes and granted the motion to compel abandonment. The district court affirmed. Read More
Posted by NCBRC - November 16th, 2016
Vehicles subject to title pawn are property of the bankruptcy estate where the debtors filed their bankruptcy petitions prior to expiration of the redemption period. Title Max v. Northington, No. 16-172 (M.D. Ga. Oct 27, 2016).
In this consolidated appeal, the chapter 13 debtors, Jonathan Northington and Gustavius Wilber, pawned their vehicles with Title Max. Under Georgia law, the debtors had the right to redeem the vehicles within thirty days of maturation of the pawn transaction by paying the remaining principal, plus interest and pawnshop fees. Both debtors filed for bankruptcy before the redemption period expired and Title Max filed proofs of claims as a secured creditor. Read More
Posted by NCBRC - July 27th, 2016
Where the non-debtor co-owner of a joint account was responsible for all the funds in the account at the time the debtor filed her bankruptcy petition, the funds were not part of the bankruptcy estate. In the Matter of Thornton, No 11-13222 (Bankr. N.D. Ga. March 25, 2016).
In anticipation of getting married, the debtor, Verna A. Thornton, and Chuck Sylvester opened a joint checking account into which they each made deposits and withdrawals intended to cover their respective living expenses. A medical malpractice judgment creditor of Ms. Thornton sought a Writ of Garnishment against that account. The credit union turned over the funds, totaling approximately $6,700.00, to the state court. When Ms. Thornton filed chapter 7 bankruptcy, the funds were turned over to the trustee and Mr. Sylvester brought an Assertion of Superior Claim in the bankruptcy court. The trustee opposed the claim arguing that the funds were part of the bankruptcy estate. Read More
Posted by NCBRC - June 24th, 2016
Two recent cases discussed the issue of whether wages subject to a pre-petition garnishment order but actually garnished within the 90-day preference period were part of the bankruptcy estate.
In Weinman v. Alternative Revenue Systems, Inc. (In re Stevens), No. 15-11776, Adv. Proc. No. 15-1340 (Bankr. D. Colo. March 23, 2016), the case was before the court on the Chapter 7 trustee’s and Alternative Revenue Systems’s (ARS) cross motions for summary judgment. Prior to the debtors’, Kwanza and Mindy Stevens, bankruptcy, ARS obtained a judgment against Mindy Stevens, and began garnishing her wages. Approximately three months after the Stevens received their chapter 7 discharge, the trustee brought an adversary proceeding against ARS arguing that two garnishments made within 90 days of the debtors’ bankruptcy were avoidable transfers under section 547. ARS countered that the relevant transfer date was the date the writ of garnishment was served on the employer rather than the date of each individual garnishment. Therefore, the transfer took place prior to the 90 day preference period. Read More
Posted by NCBRC - June 1st, 2016
A post-discharge settlement based on a medical device implanted in and removed from the debtor pre-petition was not part of the bankruptcy estate. In re Ross, No. 08-04-87445 (Bankr. E.D. N.Y. April 14, 2016)
At the time Barbara Ross filed her bankruptcy petition, there was no reason to believe the medical device was problematic and, in fact, at the time of the settlement, six years post-discharge, the debtor had suffered no injury as a result of the device. The settlement was provided out of surplus funds relating to the settlement of a class action lawsuit concerning a slightly different medical device. The trustee sought to reopen Ms. Ross’s chapter 7 bankruptcy under section 350, to administer the settlement as property of the estate under section 541. Read More
Posted by NCBRC - May 5th, 2016
Section 108(b) extends the right of a debtor to redeem property sold in a tax sale. Bryant v. Hamilton Cty, No. 15-12367, Adv. Proc. No. 15-1120 (Bankr. E.D. Tenn. April 5, 2016). Read More
Posted by NCBRC - April 21st, 2016
Comparing the potential purchaser to a vulture, a bankruptcy court disapproved a sale of estate property as not passing the business judgment test. In re Pervine, 2016 Bankr. LEXIS 712, No. 13-2289 (Bankr. E.D. N.C. March 7, 2016). Read More
