Gordon Green v. David Leibowitz
- Case Type:
- Consumer
- Case Status:
- Affirmed
- Citation:
- 23-2841 (7th Circuit, Jul 16,2024) Published
- Tag(s):
-
- Ruling:
- Wading into three areas of law-the Bankruptcy Code, the Internal Revenue Code (IRC), and Illinois state law—the U.S. Court of Appeals for the Seventh Circuit (Circuit) concluded that the registered retirement savings plan organized under Canadian law of Gordon Green (DR), a chapter 7 debtor, was not a tax-qualified retirement plan under the IRC even though it had been intended for use in his retirement and thus unexempt under § 522(b)(3), affirming the ultimate holdings of the U.S. Bankruptcy Court and District Court for the Northern District of Illinois (BC and DC).
- Procedural context:
- Challenging the DR's claimed exemption for his retirement account pursuant to 735 ILCS 5/12-1006 (Section 12-1006), the TR argued for the exemption's inapplicability on the grounds that the Sun Life Fund was organized under the laws of Canada rather than the United States, meaning it fell outside this provision's protection for accounts that qualified as retirement plans under the IRC. The BC sustained the objection, holding that a “retirement plan” must be a plan organized under 26 U.S.C. § 401(a), which requires that the trust be created or organized in the United States. On the DR's appeal, the DC Green rejected the BC's holding that Section 12-1006 incorporates a country-of-origin requirement but nonetheless found that the Sun Life Fund was not a tax-qualified retirement plan under the IRC. The DR timely appealed.
- Facts:
- On May 11, 2021, the DR filed for chapter 7 Bankruptcy. He listed the “Sun Life: Life Income Fund” (the Sun Life Fund), a Registered Retirement Savings Plan organized under Canadian law, as an asset in his petition. The DR sought to exempt the entire balance of this fund pursuant to a specific section of Illinois' statutory law, one which exempts assets “intended in good faith to qualify as a retirement plan under applicable provisions of the Internal Revenue Code of 1986.”
- Judge(s):
- Amy St. Eve; Thomas Kirsch; and Joshua P. Kolar
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