Brock v. Glasser (In re Brock)
- Summarized by Lars Fuller , BakerHostetler
- 10 years 2 months ago
- Citation:
- Brock v. Glasser (In re Brock), Nos. 14-1040 & 14-1057 (10th Cir. Oct. 16, 2014)
- Tag(s):
-
- Ruling:
- The 10th Circuit reversed the BAP for the 10th Circuit after the BAP affirmed the bankruptcy court. The Tenth Circuit ruled that based on Colorado law, and the Restatement (Second) of Trusts, debtors, as beneficiaries, trustees, and settlors of revocable inter vivos trust, were not personally liable to creditor trust for deficiency on obligation, where only trust issued promissory note, even though even though debtors pledged their home as collateral for the trust's obligation.
- Procedural context:
- After the bankruptcy court denied their objection to a creditors' claim, Debtors appealed to the BAP, which affirmed. Debtors then appealed to the 10th Circuit.
- Facts:
- Prior to filing bankruptcy, debtors settled a revocable inter vivos trust trust in which the settlors were also the sole beneficiaries and sole trustees of the trust. The trust issued a promissory note after borrowing funds from a creditor, and debtors personally pledged a deed of trust in their home as additional collateral. After trust defaulted on note, debtors filed bankruptcy, and creditor asserted claim for deficiency under note. Home was fully encumbered by senior debt, and creditor sought claim as personal obligation of debtors. Debtors objected to claim asserting that they had no personal liability on obligation.
- Judge(s):
- Kelly, Porfilio, and Matheson
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