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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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Does the "property of a business partnership exemption" apply

Resolved Question:

Does the "property of a business partnership exemption" apply to a common stock corporation. And are assets such as its bank accounts and equipment protected from inclusion in a shareholder's personal bankruptcy preceedings?
Submitted: 4 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 4 years ago.
Hi JACustomer,
Is this a "tightly-held" corporation - where there are only a few shareholders?
Customer: replied 4 years ago.
Yes - 3
Expert:  cfortunato replied 4 years ago.

1) The "property of a business partnership" exemption does not apply to corporations.

2) The assets of a corporation with shares that belong to someone who is filing a personal Bankruptcy do not directly become part of the Bankruptcy estate. Only the shares that the Bankruptcy filer owns become part of the Bankruptcy estate.

This means the Bankruptcy trustee can sell those shares, the value of which will at least partially depend on what assets the corporation owns.

 

I think this is what you wanted to know. If not, please let me know.
Thank you.
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