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Summarizing by Jaden Banks


Summarizing by Amir Shachmurove

City of Chicago v. Marilyn O. Marshall (In re Steenes)

Case Type:
Case Status:
Nos. 17-3630, 17-3663 & 17-3664 (7th Circuit, Mar 14,2019) Published
Bankruptcy court entered order maintaining property in the chapter 13 bankruptcy estate for the duration of the chapter 13 plan. Relying on § 1327(b), which provides: “[e]xcept as otherwise provided in the plan or the order confirming the plan, the confirmation of a plan vests all of the property of the estate in the debtor,” the Seventh Circuit reversed.
Procedural context:
Bankruptcy court enetered order keeping property in estate. Creditor appealed.
11 U.S.C. § 1327(b) presumptively returns the estate’s property to the debtor, but the Bankruptcy Court for the Northern District of Illinois has adopted a form order reversing this presumption and maintaining the property in the estate for the duration of the plan, which can be for as long as five years. Some debtors treat this as permission to violate traffic laws. The City of Chicago makes a car’s owner, rather than its driver, liable for many fines, including those for speeding, running a red light, and illegal parking. Chicago asked the court to vacate the orders keeping the vehicles in the estate. After stating on the record that she had not read the City’s motions, Chief Bankruptcy Judge Hollis summarily denied them. She did not mention § 1327(b), and the only reason she gave is that the court as an institution routinely keeps all assets in all Chapter 13 estates. She did not say why she and her colleagues do this.
Easterbrook, Rovner, and Hamilton

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