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Turnover Actions And The "Floating Check" Controversy, David R. Hague
Turnover Actions And The "Floating Check" Controversy, David R. Hague
David R Hague
When a debtor files for Chapter 7 bankruptcy, a Chapter 7 trustee is appointed and is charged with collecting and reducing to money the property of the bankruptcy estate. One of the most basic collection methods a trustee possesses is its turnover power under section 542(a) of the Bankruptcy Code. Section 542(a) requires any entity that is in “possession, custody, or control,” during the bankruptcy case, of property that the trustee may use, sell or lease to turn it over to the trustee and account for such property or its value.
An interesting issue has arisen that is placing debtors …