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In re Zachary Allen ; Tiara Donegan

Summarizing by Lars Fuller

Amerson v. King (In re Amerson)

Amerson, et al. v. King, et al. (In re Amerson), Case No. CO-14-045 (B.A.P. 10th Cir. September 2, 2015). Unpublished.
Postponed enjoyment of and contingencies affecting property interests do not prevent such interests from becoming property of a bankruptcy estate and a settlement agreement does not have to be the best result obtainable but must be fair and equitable and in the best interests of the estate.
Procedural context:
Chapter 7 debtors appealed the Bankruptcy Court’s decision that an inheritance was property of the estate and that the Trustee’s settlement of probate litigation involving that inheritance was appropriate given the complexity and expense of that litigation. The determination of whether an interest is property of the estate is reviewed de novo and the approval of the settlement agreement is approved for an abuse of discretion.
Two months prior to filing chapter 7, a parent of one of the debtors died leaving a will in which debtor was a beneficiary although this was not disclosed on debtors’ schedules. While the bankruptcy case was pending, debtors filed a probate action which was not disclosed to the trustee. Debtors eventually obtained discharges and the case was closed as a no asset case. Debtors reopened their case to disclose a claim for wrongful foreclosure and later, amended Schedule B to include the probate claim with a value of “unknown or $0.00.” Trustee settled the probate action for $100,000 plus costs and debtors objected arguing that the amount was too low claiming that her interest in the will was actually about $1 million.
Cornish, Nugent, Somers (Cornish)

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