Summary:
After the filing of her Chapter 7 bankruptcy, the Debtor found a cashier’s check payable to her ex-husband in the amount of $11,000.00. This check was not listed as an asset in the Debtor’s schedules, but her ex-husband was listed as holding a priority claim for $0.00 for alimony. The Debtor contended that this was for unpaid alimony and her ex-husband, in fact, had the sole allowed DSO priority claim for $15,000.00 in the case. The Debtor argued that the cashier’s check was not an asset of the bankruptcy estate and that it would be more efficient and maximize the amount received creditors, namely her ex-husband, if the cashier’s check was simply tendered to him.
The Trustee, nonetheless, contended that this was an asset of the bankruptcy estate as the negotiation of a cashier’s check is no different from a personal check. The court, however, found that for a while a transfer of a personal check is not final until the check is honored, with cashier’s check the date of transfer is final. As the facts were inconclusive regarding whether the cashier’s check was in the joint control of the Debtor and her ex-husband or her sole possession, the bankruptcy court held that the equities supported direct payment to the ex-husband.
Commentary:
This case was ultimately about the Chapter 7 Trustee seeking to get $1,850.00 in commission (not to mention attorney’s fees for representing the estate) and not about benefit to the estate.
For a copy of the opinion, please see:
Green- Date of Transfer of Cashier’s Check Determines Ownership
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