Bankr. E.D.N.C.: In re Holzapfel- Abandonment of Assets of the Estate

Summary:

The Debtor filed Chapter 7 in 1998 and received a discharge shortly thereafter. In 2009, the Debtor commenced litigation in Florida regarding 24,000 shares of SafeCard, Inc. stock, purchased for approximately $120,000.00 in November 1977, upon which the Debtor had never received distributions or dividends. The Debtor had not listed this asset in his petition and accordingly, the Chapter 7 Trustee reopened the case in September 2012, but took no subsequent steps to administer the asset. In April 2013, the Debtor sought to have the lawsuit abandoned pursuant to 11 U.S.C. § 554, asserting that the prosecution of these claims by the trustee would not be economically feasible nor in the best interest of the estate.

Following In re Locklair, No. 03–50924, 2006 WL 1491440, at *1 (Bankr. M.D.N.C. May 18, 2006), the bankruptcy court held that § 554 provides for three methods by which property of the estate may be abandoned:

(1) property may be abandoned by the trustee after notice and a hearing;
(2) the court may order abandonment upon the request of a party in interest; or
(3) property scheduled but not otherwise administered at the time of the closing of a case is abandoned to the debtor. 11 U.S.C. § 554, i.e. “technical abandonment”.

Based on the lack of affirmative prosecution of the claims by the Trustee and his lack of objection to the motion, the bankruptcy court held that continued administration of the claim in the state court litigation by the trustee would be burdensome and of inconsequential value to the estate and, were accordingly deemed abandoned to the debtor.

For a copy of the opinion, please see:

Holzapfel- Abandonment of Assets of the Estate.pdf

About

1. Bachelor of Arts degree in English Literature from Washington University, 1993. 2. Juris Doctor degree from George Washington University, 1996. Admissions to Practice of Law: North Carolina Bar, 1996. Federal District Courts for the Eastern and Middle Districts of North Carolina. Specialty Certification: North Carolina State Bar: Certified as a Specialist in Consumer Bankruptcy. Areas of Practice: Practice limited to consumer and business debtor bankruptcy law, 1998 to present. Memberships: National Association of Consumer Bankruptcy Attorneys (NACBA). North Carolina Academy of Trial Lawyers (NCATL). North Carolina Bar Association, Bankruptcy Section. Lectures prepared and presented: North Carolina Academy of Trial Lawyers seminar on bankruptcy; Topic: Counseling the Consumer Debtor Prior to Court - C.Y.A. Forms to Help 'Gird They Loins'; 2001. Middle District Bankruptcy Seminar; Topic: Preparing Chapter 13 Plans; 2002. NACBA National Convention; Topic: Efficient Office Practices; 2003. NACBA National Convention; Topic: Chapter 7 vs. Chapter 13 Debates; 2004. Middle District Bankruptcy Seminar; Topic: Chapter 7 & 13 Hot Issues; 2004. Positions held: NACBA National Convention; Convention Chair; 2008. NACBA National Convention; Panel Moderator: Topic: Basic Bankruptcy Issues; 2008. NACBA National Convention; Panel Moderator; Topic: Chapter 13-Disposable Income and Other Issues; 2007. NACBA National Convention; Panel Moderator; Topic: Representing Members of the Military and Their Families; 2007. NACBA, Member of National Board of Directors, 2006 to present. NCATL, Chair of the Bankruptcy Section, 2003 to 2007. NACBA, Chair of the North Carolina Section, 2003 to 2007. NC Bar Association, Bankruptcy Section, Bankruptcy Council Member, 2004 to present.

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