Bianca Ruiz v. Stephen Rupp, Chapter 7 Trustee
- Summarized by Jaden Banks , US Bankruptcy Court, Eastern District of Missouri
- 3 months 2 weeks ago
- Case Type:
- Consumer
- Case Status:
- Affirmed
- Citation:
- 23-006 (10th Circuit, Aug 14,2023) Not Published
- Tag(s):
-
- Ruling:
- The Bankruptcy Appellate Panel for the Tenth Circuit affirmed the Bankruptcy Court for the District of Utah’s approval of a settlement between the chapter 7 trustee and the Debtor’s estranged nonfiling spouse, because the settlement provided a reasonable return to the estate; compared to the potentially small amount recoverable by the estate, which would only be diminished by litigation expenses and other costs avoided through the settlement.
- Procedural context:
- The Chapter 7 Trustee filed a Motion to Approve Settlement, seeking court approval to resolve the bankruptcy estate's interest in and claims to three vehicles owned as community property. The Debtor objected. The Bankruptcy Court granted the motion after finding the proposed settlement would provide a reasonable return to the estate. The Debtor appealed.
- Facts:
- The Debtor, Bianca Kaylene Ruiz and her spouse Jacob Ruiz filed for divorce before a California state court in March 2019 and that litigation continues without a divorce decree, or any other division or distribution of property. In November 2021, the Debtor filed a petition for bankruptcy relief under Chapter 7 of the Bankruptcy Code. In December 2022, the chapter 7 trustee (“Trustee”) filed a Motion for Turnover Order seeking turnover of a vehicle in the possession of the Debtor, owned by the Debtor and Jacob Ruiz as community property, or seeking the equivalent value of the vehicle and the balance of the estate’s portion of the Debtor’s 2021 tax refund. The Trustee also filed a Motion to Approve Settlement/Comprise Between Trustee and Jacob Ruiz, asserting that Jacob would convey any community property interest in, and claims to the vehicle to the estate and the Trustee would convey the bankruptcy estate’s interest in two other community property vehicles in Jacob’s possession. The Debtor objected to both motions, however no creditor objected. The Bankruptcy Court held a hearing on the Motions and objections, at which it granted the Debtor’s request that the court take judicial notice of certain facts. The Bankruptcy Court determined that the settlement outweighed the potential costs of litigating ownership, retrieving the vehicles, and storing, and selling the vehicles.
- Judge(s):
- Romero, Hall, and Loyd
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