In re: Augustine Pena, III

Case Type:
Case Status:
No. EC-18-1098-SLB, 600 B.R. 415 (9th Circuit, May 21,2019) Published
Because the rents remain property of the estate, ownership of the funds has never reverted to the debtor.
Procedural context:
Debtor filed a voluntary chapter 11 petition. Bankruptcy court converted the case from chapter 11 to chapter 7. After the Ninth Circuit affirmed conversion of the case to chapter 7, the trustee abandoned the rental properties and shortly thereafter ceased collection of rents. The trustee initially tried to pay the rents to the creditors holding security interests in the underlying rental properties, but the secured creditors never cashed the trustee's checks. The trustee thereafter voided the checks and deposited the funds in the court's registry. Debtor appealed from an order denying his application to recover $51,777.03 in unclaimed funds held in the bankruptcy court's registry.
Debtor owned 30 parcels of real property, 29 of which were rental properties.
Spraker, Lafferty, Brand

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