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2008 NORTON BANKRUPTCY LAW SEMINAR MATERIALS

Appellate Court Decisions Related
To Bankruptcy Cases

By William Norton, III

longer had any rights did not generate proceeds traceable to debtor's licenses under S 541(a)(6).)

Redmond v. Lentz & Clark, P.A. (In re Wagers), ---F.3d ----, 2007 WL 4328792 (10th Cir. Dec. 12, 2007) (Chapter 7 debtor's attorney was not entitled to be compensated from pre-petition retainer for post-petition services. Under state law, the retainer was not earned until services were performed. Accordingly, the unused portion of the retainer at the time the petition was filed became property of the estate under S 541(a)(1) and could not be used to pay debtor's counsel for post-petition services. Additionally, counsel was not entitled to compensation under S 330(a) because counsel had not been employed pursuant to S 327.)

U.S. v. Mitchell, 476 F.3d 539 (8th Cir. Feb. 6 2007) (Pre-petition income from estate property does not constitute "proceeds ... or profits of or from property of the estate" pursuant to S 541(a)(6). Eighth Circuit reversed debtor's criminal conviction pursuant to 18 U.S.C. S 152(1) for failing to disclose such income.)

In re O'Lexa, 476 F.3d 177 (3rd Cir. Feb. 7 2007) (Pennsylvania "doctrine of necessity" statute did not place home held as tenant by the entirety between debtor wife and non-debtor husband within the reach of wife's creditors. The statute specifically applies to "separate property" obtained for the necessity of the family, which does not include entirety property, and the statute does not impose joint and several liability on each spouse.)

Grochal v. Ocean Technical Services Corporation (In re Baltimore Marine Industries), 476 F.3d 238 (4th Cir. Feb. 9, 2007) (Subcontractors' interest in interpleaded funds owed to government contractor debtor did not place the funds outside the debtor's estate pursuant to S 541. The bankruptcy court and district court erroneously compared the subcontractors' interest to that of a surety, whose interest would be excluded from the estate. Fourth Circuit reversed and remanded for determination of whether subcontractors' claims could nonetheless trump those of other creditors, such as through a theory of equitable trust.)

French v. Frey (In re Bergman), 467 F.3d 536 (6th Cir. Oct. 27, 2006) (Subrogation clause in insurance contract creates a property right for the insurer, and such property right is not included in the bankruptcy estate.)

Stinnett v. Laplante (In re Stinnett), 465 F.3d 309 (7th Cir. Sept. 27, 2006) (Disability insurance payments received post-petition by debtor are property of the bankruptcy estate, where at the time the petition was filed debtor's interest in the insurance contracts was property of the estate pursuant to

 

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