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§ 541(c)

Texas AG v. Brown (In re Fort Worth Osteopathic Hosp. Inc.)

Ruling
Ipso facto clause in debtor's D&O policy precluded any recovery by trustee on behalf of creditors.
Procedural posture

The plaintiff in the first action, the Attorney General of Texas, who sought to recover proceeds from policies insuring defendant directors and officers of debtor hospital, moved for partial summary on the issue that the application of 11 U.S.C.S. § 541(c)(1) did not invalidate an ipso facto endorsement in the insurance policies. Defendant trustee sought recovery under the policies for the benefit of the creditors.

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Commercial opinion summary, case decided on April 30, 2008 , LexisNexis #0608-030

West v. TD BankNorth (In re Kerr)

Ruling
Debtors interests in valid and enforceable spendthrift trusts were not property of the estate.
Procedural posture

Plaintiff bankruptcy trustee brought an adversary proceeding against defendant bank, which was the trustee of trusts of which a bankruptcy debtor was a beneficiary, and the trustee asserted that the debtor's interests in the trusts were property of the debtor's bankruptcy estate. The trustee and the bank submitted the matter for decision on stipulated facts.

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Consumer opinion summary, case decided on April 22, 2008 , LexisNexis #0508-102

Klingerman v. ExecuCorp LLC (In re Klingerman)

Ruling
Debtor's interest in LLC became property of the estate on petition date so that the estate had standing to request dissolution.
Procedural posture

Plaintiff debtor, who was a founding member of defendant limited liability corporation (LLC), commenced an adversary proceeding to judicially dissolve and wind up the LLC. Defendant, another member (member), asserted that the debtor ceased to be a member of the LLC when he filed a bankruptcy petition and thus lacked standing to seek dissolution.

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Consumer opinion summary, case decided on April 10, 2008 , LexisNexis #0508-118

In re Kongslie

Ruling
Debtor's interest in spendthrift trust was not property of the estate and not subject to turnover.
Procedural posture

The chapter 7 trustee filed a motion to compel turnover of assets or proceeds received by debtor, an individual who received a discharge in bankruptcy, in connection with her interest in her deceased father's estate. At issue was whether such property belonged to the bankruptcy estate and was properly subject to a turnover order pursuant to 11 U.S.C.S. § 542.

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Consumer opinion summary, case decided on April 10, 2008 , LexisNexis #0508-103

Flynn v. Zeitler (In re Zeitler)

Ruling
Trust that did not qualify as spendthrift trust under state law was not excluded from the estate.
Procedural posture

Plaintiff trustee filed an action against defendants, a capter 7 debtor, debtor's family members, interested parties in a trust, a limited liability partnership, and a limited liability company, seeking a ruling that the trust was invalid as a spendthrift trust. The trustee filed a motion for summary judgment.

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Consumer opinion summary, case decided on February 29, 2008 , LexisNexis #0408-047

In re Carter-Bland

Ruling
Debtor's interest in former spouse's employee stock ownership plan was excluded from estate.
Procedural posture

Debtor filed a petition under chapter 7 of the Bankruptcy Code and a trustee was appointed to represent the bankruptcy estate. The trustee filed an objection to the debtor's claim that the full value of an interest she was awarded in her ex-husband's employee stock ownership plan was not part of her bankruptcy estate.

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Consumer opinion summary, case decided on February 20, 2008 , LexisNexis #0308-120

Rhiel v. OhioHealth Corp. (In re Hunter)

Ruling
Trustee not entitled to turnover of debtor's beneficial interest in retirement plan that was subject to ERISA transfer restriction.
Procedural posture

Plaintiff chapter 7 trustees sued defendants, several retirement plans and one annuity plan, to turn over balances in accounts in which their debtors allegedly had interests per 11 U.S.C. § 542. Defendants sought summary judgment that plaintiffs were not entitled to the same by reason of 11 U.S.C. § 541(c)(2). Also at issue was the effect, if any, of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1056(d)(1).

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Consumer opinion summary, case decided on January 24, 2008 , LexisNexis #0208-097

Iannacone v. Katusky (In re Katusky)

Ruling
Debtor's contingent interest in spendthrift trust was not property of the estate.
Procedural posture

Plaintiff trustee sought a determination that an interest held by defendant debtor in his deceased mother's trust was property of the bankruptcy estate under 11 U.S.C. § 541(a)(5).

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opinion summary, case decided on August 06, 2007 , LexisNexis #0807-135

Skiba v. Laher (In re Laher)

Ruling
Employer mandated retirement plan that constituted a trust under state law was not property of the estate.
Procedural posture

Defendant debtors appealed from a decision of the District Court for the Western District of Pennsylvania which reversed the decision of the bankruptcy court that dismissed plaintiff's chapter 7 trustee's adversary proceeding alleging that the debtors' Teacher Insurance and Annuity Association – College Retirement Equities Fund ("TIAA-CREF") retirement annuity was property of the bankruptcy estate.

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Court :
Judge or Jurisdiction information not available
opinion summary, case decided on August 02, 2007 , LexisNexis #0807-134

In re Tobis

Ruling
ERISA welfare benefit plan that did not involve beneficial interest in trust was property of the estate.
Procedural posture

An insurer cancelled debtors'medical coverage. Debtors sued in state court for bad faith, breach of contract, and unjust enrichment. The state court found that debtors'claims were for the recovery of a plan benefit under the Employee Retirement Income Security Act ("ERISA"). The chapter 7 trustee moved to compromise debtors' claims (the motion was subsequently withdrawn). Debtors moved to dismiss/and or bar the trustee from state action.

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opinion summary, case decided on April 11, 2007 , LexisNexis #0607-030