Segovia v. Schoenmann

Summarized by David Hercher , U.S. Bankruptcy Court, District of Oregon
15 years 1 month ago

Citation:

Segovia v. Schoenmann, No. 09-16146 (9th Cir. Jan. 7, 2011)

Tag(s):

9th Circuit

Ruling:

In this memorandum the Ninth Circuit designated as not appropriate for publication, the court affirmed the bankruptcy court’s denial of the debtor’s attempt to exempt unexercised stock options under her former employer’s long-term incentive compensation plan.

Procedural context:

The Ninth Circuit acted on the appeal by the debtor from the district court’s order affirming the bankruptcy court’s order disallowing the exemption.

Facts:

The plan’s stated purpose is to motivate key employees by providing current additional income throughout their careers, not by deferring income until retirement. To be exempt under ERISA, a plan must either provide retirement income to employees or result in a deferral of income by employees for periods extending to the termination of covered employment or beyond. 29 U.S.C. section 1002(2)(A). The plan did neither. To be exempt under California law, a plan must be designed and used for retirement purposes. Because the plan provided current, not deferred, income, it was not designed for retirement purposes.

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