Law Commons^™

Trustee’S Broad Duty To Disclose Information To Interested Parties Under Section 704(A)(7) Of The Bankruptcy Code, Joel Cardoz

Bankruptcy Research Library

(Excerpt)

A trustee has a duty to disclose information to interested parties upon request. Section 1109(b) of title 11 of the United States Code (the “Bankruptcy Code”) includes creditors in the definition of interested parties. Trustees must obtain a court order to be excused from their duty to disclose.

A trustee’s duty of disclosure is “broad and extensive.” Courts are reluctant to excuse the trustee from their duty of disclosure unless the trustee points to a compelling “countervailing fiduciary duty … whose performance is more important than avoiding the harm resulting from withholding the information in question.”

First, this article …

The Effect Of Rejection Of A Copyright License On A Non-Debtor Licensee, Thomas Meininger

Bankruptcy Research Library

(Excerpt)

In general, a trustee may assume, reject, or assign an executory contract of the debtor under title 11 of the United States Code (the “Bankruptcy Code”). Courts have generally held that intellectual property license agreements are executory contracts. If the license is an exclusive copyright license, it is a transfer of ownership under title 17 of the United States Code (the “Copyright Act”). Thus, some courts treat a copyright license as transfer of ownership, not an executory contract.

This article explores the rights and obligations of a non-debtor licensee when a debtor-licensor rejects a copyright license under the Bankruptcy …

Generalized Creditors And Particularized Creditors: Against A Unified Theory Of Standing In Bankruptcy, David G. Carlson, Jeanne L. Schroeder

Articles

Courts have struggled toward a unified theory to explain when the trustee has exclusive jurisdiction to sue a third party for harms done to a bankrupt debtor, and when creditors have exclusive jurisdiction to sue the third party. Courts have proclaimed that when every creditor can sue the third party, then none of them can, and the right belongs solely to the trustee. Creditor rights are “generalized.” If only a proper subset of creditors can sue the third party, then the trustee is not able to subrogate to the subset. Such creditors are “particularized.” This paper proclaims the test a …

Silent Trusts Are Trending: Will They Hold Trustees To Account?, Kent D. Schenkel

ACTEC Law Journal

A common intuition is that easy money creates a disincentive to efforts for personal success. Many trust settlors seem to embrace this view but still wish to provide generously for their families. Enter the so-called “silent trust,” which seeks to moderate the disincentive effect by way of trust provisions that limit or waive notice and disclosure requirements to beneficiaries.

But a fundamental tension plagues these trusts. Beneficiaries need basic information about a trust in order to hold trustees to account. Consequently, traditional trust law provides limits on the degree to which trustees can be silent as respects a beneficiary’s right …

Champions For Justice Virtual Fundraiser 03-11-2021, Roger Williams University School Of Law, Michael M. Bowden

School of Law Conferences, Lectures & Events

No abstract provided.

The Settlement Trap, Lindsey Simon

Scholarly Works

Mass tort victims often wait years for resolution of their personal injury claims, but many who successfully navigate this arduous process will not receive a single dollar of their settlement award. According to applicable bankruptcy and state law, settlement payments may be an asset of the estate that the trustee, exercising its significant authority, administers and distributes to creditors instead of a claimant who had filed for bankruptcy. This distribution power maximizes repayment, a critical counterbalance to the robust protections and benefits that debtors receive in bankruptcy.

Setting aside the perceived unfairness of taking desperately needed money from tort victims, …

Keeping It In The Family: The Pitfalls Of Naming A Family Member As A Trustee, Richard C. Ausness

Law Faculty Scholarly Articles

This article is concerned with trusts in which either the settlor, trustee, or beneficiaries are members of the same family. For example, the settlors may be the parents, grandparents, or other relatives of the trust beneficiaries. Trustees may be settlors, parents of the beneficiaries, children of the settlor, and other family members, while beneficiaries may include either the settlor, the settlor's spouse, children, grandchildren, or other relatives of the settlor. These persons will be referred to as "family members."

Virtually all family members have disagreements with other family members and sometimes these disagreements can destroy relationships and even lead to …

Brown Order On Pending Matters, Wesley B. Tailor

Georgia Business Court Opinions

No abstract provided.

Law School News: The Honorable Margaret H. Marshall: Doctor Of Laws, Honoris Causa 05-10-2020, Roger Williams University School Of Law

Life of the Law School (1993- )

No abstract provided.

The In Pari Delicto Defense May Bar Trustees That Bring Claims Which Are Property Of The Estate Under 11 U.S.C. § 541(A), Carmine Broccole

Bankruptcy Research Library

(Excerpt)

The in pari delicto doctrine states that “[i]n a case of equal or mutual fault … the position of the [defending] party … is the better one.” This doctrine is guided by the premise that it is not within the purview of the court to resolve disputes among wrongdoers, and that denial of judicial relief in these instances effectively deters illegal activity. Within the bankruptcy context, “every Circuit to have considered the question has held that in pari delicto can be asserted against a trustee bringing a claim on behalf of a debtor in bankruptcy.”

Under Section 541(a)(1) of …

Members Only: Can A Trustee Govern An Llc When Its Member Files For Bankruptcy?, Theresa J. Pulley Radwan

Loyola of Los Angeles Law Review

Limited-liability entities allow owners to limit their personal risk similar to shareholders of a corporation while enjoying the ability to operate the business more in the manner traditionally used for a partnership. These attributes have made these business forms increasingly popular business over the past few decades because they offer the best of partnership world—control and pass-through taxation—while also offering the best of corporate world—limited liability to all of its owners. But if financial problems arise for these businesses and their owners, bankruptcy may be the final option to remedy financial difficulties. The current bankruptcy code, adopted at the same …

Under A Confirmed Chapter 11 Plan A Liquidating Trustee May Have Sole Authority To Review And Object To Claims, Ryan C. Beil

Bankruptcy Research Library

(Excerpt)

A liquidating trust is one that is organized for the primary purpose of liquidating and distributing the assets transferred to it. When a plan under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) is confirmed and establishes a liquidating trust, the trust is treated as a distinct entity. The liquidating trust terminates the debtor in possession’s status and conveys the estate’s rights and assets to a “liquidating trustee.” The confirmed plan does not simply substitute the trustee for the debtor-in-possession, but rather it creates a separate and distinct trust, holding certain property of the …

In Re Minter-Higgins, Deanna Scorzelli

Bankruptcy Research Library

(Excerpt)

A Chapter 7 trustee cannot recover from the debtor, through a turnover motion, postpetition transfers that were made out of the debtor’s bank account that resulted from pre-petition checks and debit expenditures that were not transferred by the bank to the payees until after the debtor filed for bankruptcy. The § 362(b)(11) exception from the automatic stay insulates a consumer debtor from the trustee’s attempt to require her to “turnover” these amounts.

A Chapter 7 Trustee’S Qualified Right Of Immunity May Be No Shield For Intentional, Negligent, Or Grossly Negligent Conduct: Analyzing And Applying The Three-Way Circuit Split, Nataniel E. Arabov

Bankruptcy Research Library

(Excerpt)

Quasi-judicial immunity is best understood as a blessing and a curse. A bankruptcy trustee is appointed to act as trustee through an order of the bankruptcy court. In Antoine v. Byers & Anderson, the Supreme Court provided a two-part test to analyze how far judicial immunity extends to persons who perform quasi-judicial functions in connection with their appointment. This test explains whether a judicial appointee is absolutely immune from personal liability to the estate or others. Under the test, a court (1) must decide whether the functions of the individual were historically adjudicative in nature, and (2) must …

Exercising Dominion And Control; An Initial Transferee’S Liability For Avoidable Transfers, Shelley Fredericks

Bankruptcy Research Library

(Excerpt)

Under section 550(a)(1) of the Bankruptcy Code, a bankruptcy trustee may collect the full amount of an avoidable transfer from the initial transferee of a fraudulent or avoidable transfer. Specifically, it provides that, “[e]xcept as otherwise provided in this section, to the extent that a transfer is avoided…the trustee may recover, for the benefit of the estate, the property transferred or…the value of such property, from the initial transferee of such transfer or the entity for whose benefit such transfer was made.” This section of the Bankruptcy Code gives power to bankruptcy trustees seeking to collect improperly transferred funds, …

The Insolvency Effect On Attorney-Client Privilege, Anna Piszczatowski

Bankruptcy Research Library

(Excerpt)

“The attorney-client privilege is the oldest of the privileges for confidential communications known to the common law.” This privilege has been held as sacred and essential to encourage complete and candid communication between attorneys and their clients. In fact, if the attorney’s “professional mission” is to be carried out appropriately to the fullest extent, then the attorney must be able to acquire all the information necessary to represent his client. Therefore, the privilege allows unfettered communication, for the benefit of both parties.

By carving more exceptions to the privilege, as bankruptcy courts, and even the Supreme Court, have in …

Regularizing The Trust Protector, Paul B. Miller

Journal Articles

Increasingly, settlors of trusts in on-shore jurisdictions are making use of trust protectors. Protectors serve a variety of functions but generally speaking they are appointed to provide additional security for settlors’ expectations that trusts will be administered in accordance with their intentions. Given the potential breadth and variety of functions performed and powers wielded by protectors, their use generates important and profound theoretical issues. Taking its cues from recent efforts to regularize trust protection, this essay addresses questions concerning the extension of fiduciary duties to trust protectors. Amongst other things, it questions the tenability of proposals for broad extension of …

Cybergenics Ii: Precedent And Policy Vs. Plain Meaning, Nancy A. Haller

Maine Law Review

On September 20, 2002, the U.S. Court of Appeals for the Third Circuit issued a panel opinion concluding that a court may not authorize a creditors' committee to commence an avoidance action in the trustee's name, on behalf of a bankruptcy estate. The decision shocked the bankruptcy bar and raised such a stir that many commentators raised it to the status of one of the “top cases of the year.” Furthermore, within two months, the Second Circuit came down with a squarely contrary decision, reaffirming the validity of the practice within the Second Circuit and failing to even acknowledge recent …

Arkansas’S Trust Code And Trust Planning: A Ten-Year Perspective, Lynn Foster

University of Arkansas at Little Rock Law Review

In 2001, the Uniform Law Commission adopted the Uniform Trust Code, which regulates certain aspects of trusts. One impetus for the trust code was the ever-increasing popularity of revocable trusts as part of standard estate planning packages. Another was the fact that few states—including Arkansas—had well-developed common law trust rules, let alone any statutory trust codes. In 2005, the Arkansas legislature enacted a slightly modified version of the Uniform Trust Code (UTC), titled the Arkansas Trust Code (ATC). At that time, the University of Arkansas at Little Rock Law Review published my article summarizing the most important features of the …

Whether Section 327 Professional Persons’ Legal Fees Are The Cost Of Doing Business In A Chapter 11 Bankruptcy, Christopher Atlee F. Arcitio

Bankruptcy Research Library

(Excerpt)

When a debtor attempts to reorganize under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”), the debtor typically remains “in possession” and retains all the rights of the trustee, including the right to administer the bankruptcy estate “as a fiduciary for the estate’s creditors” in a chapter 11 bankruptcy case.

Importantly, a debtor-in-possession and a trustee are empowered to employ third parties to carry out their duties. Section 327 of the Bankruptcy Code deems these individuals “professional persons.” A professional person may be compensated upon submission of a fee application to the court. The …

Conflict In The Bankruptcy Code: Ramification Of A Trustee’S 363(F) Right To Sell Property “Free And Clear” On The Lessee’S 365(H) Right To Retain Property, Aaron Leaf

Bankruptcy Research Library

(Excerpt)

Section 363(f) of title 11 of the United States Code (the “Bankruptcy Code”) allows a trustee to sell property “free and clear of any interest in such property” that a third party might have if certain conditions are met. Section 365(h) of the Bankruptcy Code allows the lessee of a rejected lease to either retain the property with all rights appurtenant to the estate, or treat such lease as terminated and sue for damages. Courts are split on if these sections of the Bankruptcy Code are compatible. The majority of courts have found these sections are not compatible, and …

The Rise And Fall Of Social Trustee Professionalism, Michael Ariens

Faculty Articles

Elite lawyers have long urged the private practice bar to account for the interests of more than their clients in their work. A lawyer who served merely as a "mouthpiece" or "hired gun" of clients failed to meet the standards of professionalism, of failing to act, in Roscoe Pound's words, "in the spirit of a public service." Pound's view, expressed in the mid-20th century, was premised on the ideal that the lawyer pursued a public calling that incidentally was remunerative. This ideal required the lawyer to serve as a social trustee, one encumbered by duties for the benefit of society. …

Interlocutory Appeals In Texas: A History, Elizabeth Lee Thompson

St. Mary's Law Journal

This Article delves into the evolution of Texas's interlocutory appeals statute with the related goals of tracing the expanding subject matter of interlocutory appeals and identifying what these changes reflect about legal priorities and developments in Texas since the late nineteenth century.

A Review Of Alexander A. Bove, Jr., Trust Protectors: A Practice Manual With Forms, Richard C. Ausness

Law Faculty Scholarly Articles

Alexander Bove has recently written a thoughtful, comprehensive and practical book entitled Trust Protectors: A Practice Manual with Forms. The book describes the powers and rights of a trust protector, as well as the fiduciary duties and potential liabilities associated with this office. In addition, the author examines the relationship between the trust protector and the trustee. He also discusses the role of the courts in this area and identifies a number of practical issues that should be considered by lawyers when they draft trust instruments that contemplate the appointment of a trust protector. Finally, the author provides extensive …

The Secured Party And His Nemesis, The Trustee In Bankruptcy: After-Acquired Property, Unidentified Proceeds, And Selected Preference Problems, John P. Finan

Akron Law Review

A trustee in bankruptcy, in addition to succeeding to the rights of the bankrupt,' has several avoiding powers. Some of these avoiding powers are based on practices which, like vice, are of "so frightful mien that to be hated [need] but to be seen." Preferences may not be included among such practices. Indeed, the English view exhibits ambivalence towards preferences. At one time it regarded "preferences [as] the good fortune of the creditor." A later view was "that the preferring of one creditor over others within a short time of bankruptcy and in contemplation thereof, was a 'fraud on the …

A Trustee’S Fiduciary Duties At The Start And End Of Administration, Robert Whitman

Catholic University Law Review

Prior to the creation of a trust and at its termination, a trustee’s fiduciary duties are often ambiguous. It is argued that, where fiduciary duties do not exist, contract law may be found to govern the rights of the settlor, the trustee, and the beneficiaries. This article refutes this argument because under the principles of modern contract law, certain conduct may be permitted that would not be acceptable if fiduciary duties existed more clearly. The most common problems arise in three areas: (1) the seeking of a receipt and release by a corporate fiduciary upon an informal termination of a …

Bennett L. Kight Et Al., Order, Melvin K. Westmoreland

Georgia Business Court Opinions

No abstract provided.

Glen W. Rollings Et Al., Order On Defendants' Motion To Dismiss And For Judgment On The Pleadings, Melvin K. Westmoreland

Georgia Business Court Opinions

No abstract provided.

The Smith Case: Is The Glass Half Full?, Elayne E. Greenberg

Faculty Publications

(Excerpt)

Many in our ADR community have already chosen to side with one of the choruses of polarized voices that are either supportive of or critical of the recent judicial decision In re Cody W. Smith. In that decision, Chief United States Bankruptcy Judge Jeff Bohm disallowed the trustee’s appointment of a mediator, because, inter alia, the trustee didn’t first secure the approval of the presiding bankruptcy judge. A cursory read of Judge Bohm’s decision mistakenly leads us to believe that the case is just about a bankruptcy trustee’s obligation to follow section 327(a) of the Bankruptcy Code, …

White Mountain Apache Water Rights Quantification Settlement Judgment And Decree, Superior Court Of Apache County, Az.

Native American Water Rights Settlement Project

Post- Settlement Court Decree, White Mountain Apache Water Rights Quantification Settlement Judgment and Decree, Parties: WMAT, White Mountain Apache Tribe, AZ, Arizona, USA, United States of America,, Arizona Water Company, Buckeye Irrigation Company, Buckeye Water Conservation and Drainage District, CAWDC, Central Arizona Water Conservation District, City of Avalon, City of Chandler, City of Glendale, City of Mesa, City of Peoria, City of Phoenix, City of Show Low, City of Scottsdale, City of Tempe, Town of Gilbert, RWCD, Roosevelt Water Conservation District, SRP, Salt River Project Agricultural Improvement and Power District, Salt River Valley Water Users' Association,

Quantification of WMAT rights …