Available at: https://scholarship.law.stjohns.edu/bankruptcy_research_library/377/
Abstract:
This article examines the scope of property included in a bankruptcy estate under section 541 of the Bankruptcy Code, with a focus on causes of action arising both before and after the bankruptcy petition date. Courts apply a two-part analysis to determine whether a claim is part of the estate: (1) whether it accrued as of the petition date, and (2) whether a post-petition claim is sufficiently rooted in the pre-bankruptcy past. This article explores how courts interpret and apply these components to determine estate property.
Summary:
This note reviews how courts determine whether causes of action—whether accruing pre- or post-petition—are included in the bankruptcy estate under 11 U.S.C. § 541. It explains that courts apply a two-step test: (1) whether the claim accrued as of the petition date under applicable state law, and (2) whether, if accruing post-petition, it is nonetheless “sufficiently rooted in the pre-bankruptcy past” to be considered estate property. “Accrual” turns on whether all elements of the claim existed and were discoverable under state law at filing. Lack of debtor knowledge typically does not prevent accrual unless discovery-based rules apply and the injury was undiscoverable.
Post-petition claims may be drawn into the estate under the “sufficiently rooted” doctrine from Segal v. Rochelle, which looks to whether the claim has a strong nexus to prepetition events such that neither the pre- nor post-petition conduct alone would be sufficient to create the claim. The note surveys cases on both sides: asbestos and employment claims brought in when rooted in prepetition injury or conduct, versus defective medical device cases excluded when no prepetition injury had manifested. The conclusion is that courts focus on the factual connection to pre-bankruptcy history, not just legal accrual, when deciding if a post-petition claim belongs to the estate.
Commentary:
This is a well-researched survey of how § 541’s broad definition of “property of the estate” interacts with claim accrual and the “sufficiently rooted” test. The note rightly underscores that accrual is a matter of state law and that “sufficiently rooted” is an independent, equitable inquiry. However, the analysis is incomplete for Chapter 13 practice because it does not address § 1306, which expands property of the estate to include not just the § 541 snapshot at filing but also “earnings from services performed by the debtor after the commencement of the case” and “property . . . that the debtor acquires after the commencement of the case but before the case is closed, dismissed, or converted.” In the Chapter 13 context, this statutory expansion often makes the “accrual” and “rooted” debates largely academic—post-petition causes of action (tort, contract, or statutory) generally enter the estate without regard to when they accrued, at least until vesting at confirmation under § 1327 alters the analysis.
For consumer bankruptcy practitioners, omitting § 1306 leaves out the key reason why post-petition slip-and-fall cases, wage claims, and even inheritances (per Carroll v. Logan) often require turnover or plan modification in Chapter 13. Without it, the article reads as though post-petition claims are presumptively excluded unless “rooted”—a statement that may mislead anyone applying the rule outside of Chapter 7. In the real-world application, In re Sorrells from the WDVA (July 2, 2025) illustrates that even where the property clearly falls into the estate (here, an inherited IRA and potential probate distribution under § 1306), the more determinative question post-confirmation is whether res judicata from § 1327 is overcome under Murphy v. O’Donnell by a “substantial and unanticipated” change in financial condition.
When a Chapter 13 case converts to Chapter 7, 11 U.S.C. § 348(f) generally limits the Chapter 7 estate to property that was part of the estate as of the original petition date and still in the debtor’s possession at conversion. Post-petition assets acquired during the Chapter 13—such as wages, causes of action, or inheritances that became estate property under § 1306—are ordinarily excluded from the new Chapter 7 estate, unless the conversion is in bad faith. This “snapshot back” effect can effectively “remove” post-petition property from the estate, returning it to the debtor, and is often a strategic consideration for debtors facing an unexpected post-petition windfall in a struggling Chapter 13.
In short: the note is a solid primer on § 541 doctrine, but Chapter 13 lawyers should mentally append “. . . and then check §§ 348, 1306 and 1327” before relying on it in practice.
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