Bankr. W.D.N.C.: In re Bronikowski- Employment Bonus is an Expectation of Payment not Contingent Interest

Summary:

Ms. Bronikowski disclosed a potential employment bonus in her November 11, 2016, bankruptcy petition, asserting that it was not an asset of her bankruptcy estate, as the award of the bonus was at the complete discretion of the employer, and, in the alternative and out of caution, claimed it as exempt as wages of the debtor under N.C.G.S. § 1-362. The Trustee objected to the exemption and argued that the potential employment bonus was a contingent interest and asset of the estate.

After a thorough review of case from across the country, the bankruptcy court held "that the discretion of the employer is the most important consideration for determining whether an anticipated bonus is property of the estate." See Klein-Swanson, 488 B.R. 628 (B.A.P. 8th Cir., 2013);Sharp v. Dery, 253 B.R. 204, 207 (E.D. Mich. 2000); Mendelsohn v. Gonzalez (In re Gonzalez), 559 B.R. 326, 331 (Bankr. E.D.N.Y. 2016); Vogel v. Palmer (In re Palmer), 57 B.R. 332, 333 (Bankr. W.D. Va. 1986). That complete discretion rendered the potential employment bonus a mere hope or expectation and not a contingent interest. Additional considerations include that Ms. Bronikowski was required to maintain employment to remain eligible for any bonus. Since the potential employment bonus was not an asset of the estate, the bankruptcy court did not need to consider the aptness of the claimed exemption.

For a copy of the opinion, please see: