- Case Type:
- Case Status:
- United States Bankruptcy Appellate Panel of the Ninth Circuit No. NC-20-1087-FBG (9th Circuit, Nov 04,2020) Not Published
- The BAP affirmed the bankruptcy court in full. The BAP discussed that bankruptcy court did not error in determining the present value available for distribution or the amount available under a hypothetical liquidation. The BAP also noted that the bankruptcy court did not error in classifying property owned by an LLC as not property of the estate under the applicable state law.
- Procedural context:
- The Debtor filed Chapter 13 bankruptcy and amended her schedules and proposed plan multiple times. The instant proposed plan provided for paying unsecured creditor five percent of their claims, retaining ownership of the Commercial Property, and surrendering any rights she had to the Residential Property. The Debtor claimed she had no equitable interest in the Residential Property given her mother’s role as the caretaker. The Chapter 13 Trustee and the Creditor filed objections to the Debtor’s Chapter 13 Plan asserting that the proposed plan did not pass the “best interest of creditors test” under § 1325(a)(4). The Creditor asserted that the Debtor’s claims that the Debtor had no equitable interest in the Residential Property were a veiled transfer of rights to the Debtor’s mother. The bankruptcy court (N.D. Cal.) overruled the objection of the Creditor finding that the best interest of creditors test was met. Specifically, the bankruptcy court noted that under New York law the co-tenant’s contributions must be considered when assessing the value that would result from a sale. Further, under California and New York law property or rental income that belongs to an LLC does not belong to an individual and therefore, it is not included as be part of a personal bankruptcy. The Creditor timely appealed. The Trustee withdrew her objection, and the court confirmed the plan.
- The Debtor prior to bankruptcy held a fifty percent interest in an LLC. The LLC owned commercial real estate in New York (Commercial Property). The Debtor and her business partner ousted the Creditor from the LLC following a business dispute. The Creditor sued the Debtor and the business partner in state court. The Debtor also owned residential real estate in New York as joint tenants with her mother and the business partner (Residential Property). Although the New York Property was purchased in 2004, the Debtor’s mother had been the primary caretaker, since at least 2014, covering the mortgage, liens, and home repairs.
- The Hons. Faris, Brand, and Gan
The Security National Bank of Sioux City, IA v. Vera T. Welte Testamentary Trust
Summarizing by Amir Shachmurove
3623 in the system
5 Being Processed