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In re Zachary Allen ; Tiara Donegan

Summarizing by Lars Fuller

Brumfiel v. Lewis (In re Brumfiel)

Brumfiel v. Lewis, et al. (In re Brumfiel), Case No. CO-15-014 (B.A.P. 10th Cir. October 8, 2015). Unpublished.
Claims debtor fails to disclose in her bankruptcy schedules remain estate property upon closing of the case and bankruptcy court has jurisdiction to approve a settlement respecting those claims after case is re-opened.
Procedural context:
Chapter 7 debtor appealed the bankruptcy court’s approval of a settlement agreement pursuant to which the trustee sold claims against a lender to the lender for $10,000. Debtor argued that the claims against the lender were not property of the estate, that the pending appeals in other courts prevented the bankruptcy court from acting, and that the bankruptcy court should have abstained. These arguments are subject to de novo review. The propriety of the bankruptcy court’s decision to approve the settlement agreement is reviewed for abuse of discretion.
Debtor defaulted on a promissory note and deed of trust and the lender began foreclosure proceedings. Debtor filed chapter 7 and her case was closed as a no asset case and she received a discharge. Thereafter, debtor sued the lender in federal court for wrongful foreclosure and several other causes of action. Debtor’s case was dismissed because the court determined that the claims belonged to the bankruptcy estate since they accrued prepetition and debtor had failed to schedule those claims in her bankruptcy filings. Debtor reopened her bankruptcy case and the trustee filed a notice of intent to abandon the claims against the lender and the lender objected. Trustee and the lender then settled with the claims being sold to the lender for $10,000.
Karlin, Cornish, Michael (Karlin)

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