1.This is not about removal of the trustee. It is much to late now (at the end of this case) to file a motion to remove the trustee. It is about a law suit against the trustee who is making hundreds of thousands of dollars for himself.
A: I respectfully XXXXX XXXXX goal is to have the trustee's actions sanctioned or reversed. This could be accomplished by the bankruptcy court judge as part of a removal action, or by a separate law suit -- however, to file a separate lawsuit, generally requires you to file a motion for leave from the bankruptcy court to file such an action (this is the core holding of the Barton doctrine as it applies to bankruptcy court trustees).
2.How does the Barton doctrine apply to a law suit against a trustee? Do you mean that the BK court is involved in the law suit even if I file it outside of the BK court?Or do I just have to have permission from the BK court to file the law suit in the state court?
A: You need to get permission from the bankruptcy court to separately sue the bankruptcy trustee. The court will use the Barton factors that I previously described to determine whether or not the court will grant your request. If the court does not grant leave to separately sue, but it nevertheless finds that the trustee has acted improperly, then the court could sanction the trustee in an number of different ways (including referring the matter to the U.S. Trustee Program for a criminal investigation). This would not, however, necessarily get you any money or a ruling that would reverse the trustee's liquidation actions. However, if you were to be denied leave to separately sue, then you, but the court indicates that there may be improprieties of the trustee, then you could file a motion to remove the trustee and to set aside the bankruptcy court's orders concerning the liquidation/sale of your home, and potentially be able to negotiate a more favorable outcome from a new trustee. There are a lot of "what-ifs" in this scenario -- it's not the sort of thing where there is an easy direct route to a speedy conclusion. If it were, then you would have already figured it out for yourself.
3."If the proceeding is under 28 USCS 959(a)...no court approval is necessary" What does this mean with regards XXXXX XXXXX law suit against a trustee who did not take over running my rental business but instead threw out some hundreds of thousands of dollars in rentals creating debt for my estate and an excuse to sell the property in order to make a commission on a sale.
A: Where an act by the trustee is done in his/her official capacity, the bankruptcy court controls whether or not a suit against the trustee may be had. 28 U.S.C. 959 is intended to redress "torts" (wrongful acts of negligence, assault, battery, civil conversion/theft, false imprisonment, interference with chattel, trespass, negligence, fraud, products liability, defamation, malicious prosecution, invasion of privacy: misappropriation of likeness/identity, false light attribution, public disclosure of private facts, intrusion into seclusion, etc.). To sue based upon the liquidation of your property -- without leave of the bankruptcy court, you would have to show that the trustee has committed some wrongful act beyond merely the liquidation itself. Intentionally mis-managing the bankruptcy estate property in order to advance a personal goal outside of the trustee's duties is a breach of fiduciary, and that is potentially beyond the reach of the bankruptcy court.
However, if you sue without requesting leave, then the trustee can ask the bankruptcy court to enforce the Barton doctrine against you. This leaves you in a catch-22. There is no way to avoid asking the court for leave to sue the trustee, no matter what the reason is, because the trustee can force you back into bankruptcy court to decide whether the trustee can be separately sued.
4. Where do I go to see the case law you refer to Beck v Fort James Corp?
See this link.
Hope this helps.
NOTICE: My goal here is to educate the public about the law. Please help me in this effort by clicking Accept for my Answer to your Question.
And, if you need to contact me again, please put my user id on the title line of your question (“To Socrateaser”), and the system will send me an alert. Thanks!