Shapiro v. Henson
- Summarized by Richard Corbi , Otterbourg P.C.
- 9 years 4 months ago
- Citation:
- No. 11-16019, 9th Cir. Jan. 9, 2014 (For Publication)
- Tag(s):
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- Ruling:
- The Ninth Circuit Court of Appeals held that Section 542 of the Bankruptcy Code and pre-Bankruptcy Code practice permit a trustee to seek turnover from an entity that had "possession, custody, or control" of the subject property during the bankruptcy case whether or not the entity had "possession, custody, or control" at the time the turnover motion is filed.
- Procedural context:
- The Ninth Circuit Court of Appeals REVERSED the District Court's decision and REMANDED.
- Facts:
- On August 7, 2009, Barbara Henson ("Henson") filed a voluntary Chapter 7 bankruptcy petition. At the time of the bankruptcy petition, Henson had a Bank of America checking account with $6,955.19 in it. Henson had several written checks drawn on the account before filing for bankruptcy, but the bank did not honor the checks until after Henson filed for bankruptcy. On October 2, 2009, Brian Shapiro ("Shapiro"), the bankruptcy trustee appointed in Henson's bankruptcy case, sent a letter to Henson demanding that Henson turn over the funds that had been in her bank account.
On November 3, 2009, Henson denied being in possession of the funds and indicated that she would not comply. On November 11, 2009, Shapiro responded by filing a motion for turnover under section 542 of the Bankruptcy Code against Henson to recover the $6,155.19 of her bankruptcy petition date balance.
The bankruptcy court denied the motion because Henson did not have possession or control of the funds at the time Shapiro filed the motion for turnover. Shapiro appealed to the district court. The district court affirmed the bankruptcy court. Shapiro then appealed to the Ninth Circuit Court of Appeals.
- Judge(s):
- N. Randy Smith, Jacqueline H. Nguyen, Gordon J. Quist
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