In re Wright

(6th Cir. B.A.P. April 17, 2017)

The Sixth Circuit B.A.P. reverses the bankruptcy court’s finding that a personal injury claim was not abandoned, but affirms the finding that a second claim was not abandoned. The debtor listed the personal injury claim in his schedules, but not the second claim. The trustee filed a notice of no distribution, noting that the personal injury claim was not abandoned. The case was closed, and the trustee later moved to reopen the case to settle the personal injury claim. The court holds that because the trustee did not obtain an order preventing abandonment upon closing the case, the claim was abandoned under 11 U.S.C. § 554. The bankruptcy court correctly held that the unscheduled claim was not automatically abandoned upon closing the case pursuant to § 554(d). Opinion below.

Judge: Harrison

Attorney for Debtor: Gino Pulito

Attorney for Trustee: Lauren A. Helbing

2017-04-17 – in re wright

Author: Matt Lindblom

 

 

Ellmann v. Baker (In re Baker)

(6th Cir. July 2, 2015)

The Sixth Circuit applies the Supreme Court’s 2014 decision in Law v. Siegel and affirms the bankruptcy court’s order allowing the debtors to amend their bankruptcy schedules and claim an exemption in a cause of action they failed to disclose in their original schedules. The debtors had received a discharge and the case was closed with the original schedules in place. They then pursued the cause of action. The trustee moved to reopen the bankruptcy case, and the debtors sought to amend their schedules and claim an exemption in the cause of action. The trustee objected, arguing the debtors acted in bad faith and with fraudulent intent in concealing the asset. Relying on Law v. Siegel, the court holds a debtor’s exemption cannot be taken away as a sanction. The court also finds the trustee’s objection was untimely. Opinion below.

2015-07-02 – in re baker

Author: Matt Lindblom

Metrou v. M.A. Mortenson Company

(7th Cir. Mar. 23, 2015)

The seventh circuit reverses the district court’s order limiting the trustee’s recovery on the debtor’s tort claim to the value of creditor claims not already paid through the bankruptcy. The debtor had scheduled a workers’ compensation claim when he filed the chapter 7 petition, but after receiving the discharge he brought claims for the same injury and sought significant damages. The tort defendants moved for summary judgment, arguing that the debtor was estopped from asserting the claims because he failed to schedule them in the bankruptcy, and the court appropriately granted that motion. The debtor then moved to reopen the bankruptcy so that the trustee could pursue the claims. The district court allowed the substitution but entered an order limiting the damages sought to the value of the amount of the creditor claims not paid in the bankruptcy (because the debtor should not be permitted to benefit when he omitted the claim from his schedules). The claims were not worth pursuing after the reduction and thus the trustee appealed. The seventh circuit holds that the claim should not be reduced so that creditors are harmed. Instead, the district court should determine whether the debtor’s omission was intentional such that he should be barred from sharing in any recovery on the claim. Opinion below.

2015-03-23 – metrou v ma mortenson company

Author: Matt Lindblom