Smith v. Robbins (In the Matter of IFS Financial Corp)

Summarized by Peter Ruggero , Ruggero Law Firm PC
10 years 5 months ago

Citation:

Case No. 14-20588 (5th Cir. Sep 25, 2015)

Tag(s):

Ruling:

Affirmed removal of chapter 7 trustee in all pending cases.

Procedural context:

The Bankruptcy Court entered order for chapter 7 trustee to show cause why he should not be removed under section 324(a) of the bankruptcy code. After an evidentiary hearing, the Bankruptcy Court ordered removal of the trustee. The District Court affirmed. The Court of Appeals for the Fifth Circuit affirmed.

Facts:

The chapter 7 trustee W. Steve Smith engaged his own law firm to represent the chapter 7 bankruptcy estate that he served as trustee over. The trustee's wife served as appellate counsel. The trustee and his wife, along with their two small children, traveled to New Orleans, Louisiana for an appellate oral argument on behalf of the estate as its counsel. They stayed four nights and sought reimbursement for some, but not all, of their expenses. The Bankruptcy Court found the trustee to have violated his fiduciary duties by seeking some of the expenses from the trip. The Bankruptcy Court's finding was based, in part, on other prior conduct of the trustee in other matters in preferring his firm's interests over the estate's interests.

Judge(s):

Higginbotham, Dennis, and Haynes

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