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         Bankruptcy Trustees

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Amicus Briefs

NABT’s Amicus Committee is one of the organization's busiest committees. Although not every case submitted for consideration is accepted, the Amicus Committee selects several cases each year for which amicus briefs are filed. A selection of those cases, and the filed briefs, are below.

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Reeves v. Callaway

4th Cir. (pending)

Arguments by amicus counsel:
Where a debtor's home is over-encumbered by a mortgage and tax liens, leaving no equity in the property, there is nothing for the debtor to exempt. The Trustee's negotiated carve out with the IRS does not create equity or an asset which may be exempted by the debtor, contrary to the debtors' argument that the residence is "exempt property," that the exempt property has "left the estate" and exempt property cannot be sold under §363 or § 724. While the phrase "exempt property" is not defined, that phrase does not mean "any property claimed exempt in part," but instead means "the slice of equity in property claimed as exempt." Properly understood, §724 in combination with section 363, authorized the sale of property subject to tax liens even if only the tax lien creditor would be paid.

Opinion
Brief

USACM Liquidating Trust v. Deloitte & Touche LLP

9th Cir. (pending)

Arguments by amicus counsel:
The District Court's interpretation of section 541(a) impermissibly circumscribed state law on in pari delicto. Nevada law applies in pari delicto under a flexible standard that takes into account the equities and public policy and there is no equitable basis for imposing in pari delicto against a trustee. Permitting trustees to sue culpable parties promotes the strong public interest in deterrence and victim compensation, allocates risk fairly, increases incentives to detect and prevent fraud by managers and does not reduce ownership's incentive to hire honest managers.

Opinion
Brief

Rameker and Adili d/b/a Kegonsa Plaza v. Clark (In re Clark)

7th Cir. (2013)

Arguments by amicus counsel:
An inherited IRA does not constitute a "retirement fund" entitled to exemption status under § 522(b)(3)(C) and (d)(12).

Opinion
Brief

Malley v. Agin (In re Malley)

1st Cir. (2012)

Arguments by amicus counsel:
Bankruptcy courts may surcharge a debtor’s exemptions to remedy a debtor’s failure to turnover non-exempt assets. Section 105(a), the Court’s inherent equitable powers, and Marrama v. Citizens Bank of Massachusetts support the validity of the surcharge remedy. Surcharge is necessary and appropriate to remedy a debtor’s fraud.

Opinion
Brief

Peterson v. McGladrey & Pullen, LLP (In re Lancelot Investors Fund, L.P.)

7th Cir. (2012)

Arguments by amicus counsel:
As a matter of public policy, bankruptcy trustees should be permitted to prosecute claims against a company’s gatekeepers. Applying in pari delicto against a trustee is not supported by public policy or Illinois law.

Opinion
Brief

Exec. Benefits Ins. Agency v. Arkison (In re Bellingham Ins. Agency, Inc.)

9th Cir. (2012)

Arguments by amicus counsel:
Stern v. Marshall does not preclude bankruptcy judges from entering final orders in fraudulent transfer actions. Prompt and effective settlement of bankruptcy estates is a valid Congressional goal requiring that bankruptcy courts be authorized to enter final judgments in transfer actions. At a minimum, a bankruptcy court presiding over a fraudulent transfer action may submit a report and recommendation to the federal district court.

Opinion
Brief

Warren Investment, Inc. v. General Casualty of Wisconsin (In re J & J Video)

6th Cir. (2012)

Arguments by amicus counsel:
Sixth Circuit should not abandon its willful and wanton standard for personal trustee liability and adopt a mere negligence standard. To do so would provide a substantial disincentive to the enlistment of new qualified trustees and the retention of experienced trustees.

Opinion
Brief

Schwab v. CGL, LLC (In re Vistacare Group, LLC)

678 F.3d 218 (3rd Cir. 2012)

Arguments by amicus counsel:
The Barton doctrine remains a viable principle of the common law, notwithstanding the changes to the bankruptcy law that began in 1978. The bankruptcy judge abused his discretion in permitting the suit against the trustee to proceed; the litigation against the trustee is central to the administration of the estate, is barred by the doctrines of collateral estoppel and res judicata, and is filed against a person clothed with derived judicial immunity.

Opinion
Brief

Hopkins v. UST (In re Salgado-Nava)

9th Cir.

Arguments by amicus counsel:
The trustee must be awarded his full statutory commission as reasonable compensation under 11 U.S.C. § 326 and § 330(a)(7), where the net recovery to the estate was $5,654.05 and would result in a 39% distribution to creditors with timely-filed proofs of claim with payment of the full statutory commission.

Opinion
Brief

SS Farms, LLC v. Sharp (In re SK Foods, L.P.)

2012 WL 400421 (9th Cir. 2012)

Arguments by amicus counsel:
The bankruptcy court did not abuse its discretion by not removing the trustee. The trustee did not violate the appellant’s privacy rights. Cause does not exist to remove the trustee. Public policy disfavors removal of a trustee.

Opinion
Brief

Stern v. Marshall (In re Marshall)

546 U.S. ___ (2011)

Arguments by amicus counsel:
Bankruptcy trustees require a unitary claims allowance process in order to efficiently administer their cases. The claims allowance process under the present jurisdictional scheme is Constitutional, allowing bankruptcy judges to finally adjudicate compulsory counterclaims to proofs of claim.

Opinion
Brief

Marrama v. Citizens Bank of Mass. (In re Marrama)

549 U.S. 36 (2007)

Arguments by amicus counsel:
Bankruptcy courts, bankruptcy trustees, and chapter 7 debtors are all duty bound to ensure the integrity of the bankruptcy system. Section 706(a) of the Bankruptcy Code is unambiguous and affords debtors only a limited right to convert a chapter 7 bankruptcy case to a chapter 13 case. The bankruptcy code does not afford absolute rights or privileges to debtors who act in bad faith and abuse the bankruptcy system.

Opinion
Brief