In re: Wayne Wright

by
In his 2010 Chapter 7 petition, the debtor listed a claim against Simms based on an injury while under Simms’ employ, but did not claim an exemption on Schedule C. In 2011, a complaint was filed against Simms; in 2012, a companion action was filed against BWC. The debtor filed amended schedules, valuing the Simms claim at $21,625, but claiming no exemption. The debtor never listed the BWC claim. In 2013, the certified that the estate had been fully administered except for the Simms claim, stating: The ... settlement shall remain property of the bankruptcy estate upon the entry of a final decree; if money becomes available ... the case will be re-opened. The bankruptcy court closed the case; the order contained no reservations regarding the claim. In 2015, the trustee was notified of a settlement offer and moved to reopen the case. The debtor argued that the trustee had abandoned any interest in the personal injury litigation and that the settlement encompassed the claim against BWC in which the trustee had no interest. The court approved a settlement of $180,000. At a hearing, without evidence or testimony, the bankruptcy court found that the claims were not abandoned. The Sixth Circuit Bankruptcy Appellate Panel reversed in part. The court made no findings to support approval of the settlement over the debtor’s objections. Because no court order preserved the personal injury claim as an asset, the bankruptcy court erred by holding that the trustee did not abandon that claim under 11 U.S.C. 554(c); the unscheduled BWC claim was not abandoned. View "In re: Wayne Wright" on Justia Law