Mere Physical Possession Not Legally Cognizable Property Interest

Posted by NCBRC - January 28th, 2016

The Ninth Circuit found that mere possession of property whose title had been fully adjudicated against the debtor in a state unlawful detainer action, was not a property interest protected by the automatic stay. Eden Place v. Perl, No. 14-60049 (9th Cir. Jan. 8, 2016). Read More

Debtor May Not Compel Sale of Property under Section 363(h)

Posted by NCBRC - September 4th, 2015

A chapter 13 debtor does not have the authority under section 363(h) to sell estate property free and clear of a co-owner’s interest. Kao v. Kelly (In re Kao), No. 15-31193, Adv. Pro. 15-3114 (Bankr. S.D. Tex. July 7, 2015). Read More

Trustee’s Valuation of Unresolved Pre-Petition Cause of Action Rejected

Posted by NCBRC - August 17th, 2015

A bankruptcy court rejected a chapter 13 trustee’s valuation of the debtor’s pre-petition cause of action and found that an estimated value of the state court case should not be included in the plan distributions but that the plan may be modified if the debtor obtains a money judgment during the commitment period. In re Morales, No. 12-7296 (Bankr. P.R. July 2, 2015). Read More

Funds from Consent Order Not Estate Property

Posted by NCBRC - July 22nd, 2015

Funds the debtor received through operation of a post-petition consent order between banking regulators and Bank of America were not part of the bankruptcy estate subject to turnover. MacKenzie v. Neidorf (In re Neidorf), No. 14-1496 (B.A.P. 9th Cir. July 10, 2015). Carrie Margaret Neidorf’s home was foreclosed upon while she was in bankruptcy and years later, while her bankruptcy case was still open and pursuant to a national settlement between banking regulators and Bank of America, she received $31,250 as a result of the foreclosure. The 2011 Consent Order (amended in 2013) required Bank of America to make a $1,127,453.261 cash payment to a Qualified Settlement Fund. That fund was then distributed to borrowers who had experience foreclosure within a specified period. The chapter 7 trustee sought turnover of the funds arguing that they were property of the estate. The bankruptcy court disagreed and the BAP affirmed.

The BAP stated three conditions that must be met for after-acquired property to be considered part of the estate under section 541(a)(7); “(1) It must be created with or by property of the estate; (2) acquired in the estate’s normal course of business; or (3) otherwise be traceable to or arise out of any prepetition interest included in the bankruptcy estate.” The panel found that the fact that the foreclosed residence was property of the estate was not dispositive. It found that the debtor’s entitlement to the foreclosure payment arose out of the post-petition Consent Order rather than out of her ownership of the property. The panel concluded: “Seen in this light, that the estate had an interest in Debtor’s Residence is not enough. Nowhere has Trustee shown how the estate obtained an interest in the Foreclosure Payment itself when the qualifying events giving rise to Debtor’s legal rights to the payment all occurred postpetition and were held solely by the borrowers.”

Neidorf BAP 9th opinion

Debtor Lacks Standing to Bring Adversary Complaint Based on Pre-Petition Claims

Posted by NCBRC - March 23rd, 2015

The debtor’s pre-petition TILA claims were part of his chapter 7 bankruptcy estate and, therefore, only the trustee had standing to bring those claims while the bankruptcy was pending. Bernstein v. Wells Fargo (In re Bernstein), No. 14-65054, Adv. Proc. 14-5306 (Bankr. N.D. Ga. Jan. 2, 2015). Read More

Lump Sum Workers’ Compensation Settlement Exempt under 522(d)(11)

Posted by NCBRC - February 11th, 2015

Contrary to majority opinion, proceeds of a lump sum workers’ compensation settlement were found to be exemptible under section 522(d)(11)(E), to the extent necessary for support of the debtor and his dependents. In addition, a Medicare “set aside” is not property of the estate. Carr v. Arellano (In re Arellano), No. 14-990 (Bankr. M.D. Pa. Jan. 5, 2015). Read More

Bankruptcy Reopened to Add Insurance Proceeds to Estate

Posted by NCBRC - January 12th, 2015

The bankruptcy court properly reopened the debtor’s chapter 7 case to permit the trustee to administer insurance proceeds where the debtor’s interest in the funds pre-dated his bankruptcy even though he did not actually acquire the funds until post-discharge. Wojcik v. Gold (In re Daher), No. 14-8028 (B.A.P. 6th Cir. Dec. 4, 2014). Read More

Revocation of Technical Abandonment

Posted by NCBRC - December 9th, 2014

Technical abandonment of an estate asset may be revoked if the abandonment was caused by deception by the debtor or inadvertence or mistake on the part of the trustee. Miller v. Reaves (In re Miller), No. 13-1307 (B.A.P. 9th Cir. Dec. 5, 2014). Read More

Post-Petition Equity Goes to Debtor upon Conversion

Posted by NCBRC - October 13th, 2014

Equity created by payments into a chapter 13 plan belongs to the debtor upon conversion to chapter 7. In re Hodges, No. 13-361 (E.D. Tenn. Sept. 29, 2014). Read More

Trustee Fee Cut Where No Meaningful Distribution

Posted by NCBRC - October 8th, 2014

In three consolidated chapter 7 cases, the Bankruptcy Court, finding that carve-out or short sale agreements did not lead to any meaningful distribution to creditors, reduced the trustee’s fee by 50% of the requested amount. In re Scoggins, No. 12-42158 (Bankr. E.D. Cal. Sept. 8, 2014) (the court approved the fee request in a fourth, business, case). Read More

Tag Archive: Property of Estate