Lawrence v. Commonwealth of Kentucky Transportation Cabinet (In re Shelbyville Road Shoppes, LLC)

(6th Cir. Jan. 5, 2015)

The Sixth Circuit affirms the bankruptcy court’s order dismissing the trustee’s complaint for turnover of a good faith deposit. The debtor was the assignee of a real property purchase agreement with the cabinet, pursuant to which the debtor could purchase certain real property by a certain date. A good faith deposit had been made. The debtor filed a chapter 7 bankruptcy petition a few days before the deadline to purchase, and the trustee then sought turnover of the deposit. The court holds that the trustee does not have a right to demand turnover of the deposit because it is not part of the bankruptcy estate. The debtor did not have a present right to the deposit at the time the bankruptcy was filed. Opinion below.

2015-01-05 – lawrence v ky transportation cab

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