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socrateaser
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 33559
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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Customer Does a trustee in a ChapterXXXXXpermission

Resolved Question:

Customer

Does a trustee in a ChapterXXXXXpermission to just drop the value of a property he is trying to sell by a million dollars? If the trustee can sell expensive property under value – he might be getting a payment on the side beside his commission on a sale.

I think the trustee’s attorney is attempting to create an insolvent case for an excuse to sell my residence to fill the gap he is purposely creating by listing the expensive property under value. This trustee's maneuver came about when I opposed the trustee’s motion to list & sell my residence.

I have fought to save my home and corrected the trustee’s net proceeds from a sale by adding my homestead exemption of 75K, the 2nd mortgage on the property (the trustee left out) and a lien against my ex husband’s estate that is not on the title report – only in the county records. However the lien was pulled by the Bank that holds my mortgage. The Bank used both husband & wife names when it pulled the credit report and discovered the lien.



The Result – The trustee’s attorney creatively made a huge drop in the change on the listing of the expensive property then declared my case insolvent thus the need to also sell the family home. This is the new excuse.

If I need to appeal can I file an appeal directly with the 9th circuit of appeals?

Previously the trustee’s attorney changed my appeal of a court order from the Bankruptcy Appellate Panel to the District court. The District Court is not well versed in BK law.

If I file an appeal with the BAP it will be transferred to the District Court by the trustee’s attorney.
Submitted: 2 years ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 2 years ago.
A direct appeal to the 9th Circuit requires that the bankruptcy court certify:

(i) the judgment, order, or decree involves a question of law as to which there is no controlling decision of the court of appeals for the circuit or of the Supreme Court of the United States, or involves a matter of public importance;
(ii) the judgment, order, or decree involves a question of law requiring resolution of conflicting decisions; or
(iii) an immediate appeal from the judgment, order, or decree may materially advance the progress of the case or proceeding in which the appeal is taken; and
if the court of appeals authorizes the direct appeal of the judgment, order, or decree.

BotXXXXX XXXXXne, it's not easy to get a direct appeal, and there is no way to stop the transfer from the BAP to District Court.

Hope this helps.


And, if you need to contact me again, please put my user id on the title line of your question (“ToCustomerrdquo;), and the system will send me an alert. Thanks!

Customer: replied 2 years ago.

Thank you.

The info in my question above concerns the trustee's wish to sell my residence therefore drop in the value of the expensive property in order to show the Court there is not enough money to give to my deceased ex husband's estate therefore sell the residence. I bought my own properties and have watched the trustee squander my estate for his own benefit.

 

I am trying to work up a new botXXXXX XXXXXne for the net proceeds from a sale of my esidence but have not included the trustee's percentage of a sale for $1,200,000.00 sale or if the percentage is taken off the top number or from the net profit. You previously gave me information on trustee's fees. I went to the site but it did not give me an answer. Would the trustee get 3% from the net profits from a 1,200,000.00 sale?

Expert:  socrateaser replied 2 years ago.

Bankr. Code 326 imposes a sliding scale percentage cap on the trustee's reasonable compensation based on "all moneys disbursed or turned over in the case" by the trustee to parties in interest (including secured creditors but excluding the debtor):

  • 25% on the first $5,000 or less;
  • 10% on any amount in excess of $5,000 but not in excess of $50,000;
  • 5% on any amount in excess of $50,000 but not in excess of $1,000,000; and
  • 3% on amounts in excess of $1,000,000. 11 USCA § 326(a).

Hope this helps.

Customer: replied 2 years ago.

Thank you but I am not sure how to figure this out. The sale price is 1,200,000.00. Does the 3% come off of the net profits or from the listing price?

 

I know the trustee has been paid from another sale - at least over 50K and antiicipates 225K from the expensive sale.

 

 

Expert:  socrateaser replied 2 years ago.
Listing price.
Customer: replied 2 years ago.
The very first part of the question - re the trustee right to just drop the value of an expansive property without court permission?
Expert:  socrateaser replied 2 years ago.
A Chapter 7 trustee must maximize the value of the bankruptcy estate so as to allow for maximum recovery by creditors. Commodity Futures Trading Comm'n v. Weintraub (1985) 471 U.S. 343, 352, 105 S.Ct. 1986, 1993; In re Feiler (9th Cir. 2000) 218 F.3d 948, 952; see also Matter of Taxman Clothing Co. (7th Cir. 1995) 49 F.3d 310, 315 (because trustee's duty is to maximize estate assets, trustee not required to recover asset whose cost of collection exceeds its value.)

If you object to the sale price of property, you can, as previously discussed, bring a motion to remove the trustee for breach of fiduciary to the bankruptcy estate.

Note: Each time I read one of your questions, the underlying issue is the same: you appear to believe that the trustee is engaged in a personal vendetta against you, and a conspiracy to sell off your property for the benefit of the trustee's personal friends.

If that's what you believe, then your recourse is to ask the court to remove the trustee. If you do not, then the trustee will just continue to slowly and inexorably push forward against you until you are wiped out -- because the trustee has the power to do this, unless you make an affirmative effort to stop him/her from doing so.

Hope this helps.


And, if you need to contact me again, please put my user id on the title line of your question (“ToCustomerrdquo;), and the system will send me an alert. Thanks!

socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 33559
Experience: Attorney and Real Estate Broker -- Retired (mostly)
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