To actually effect abandonment of unadministered assets in a bankruptcy case, the asset in question must appear on Schedule A/B. That's the hard teaching of Stevens v. Whitmore from the 9th Circuit BAP. A passing reference to an asset in the SOFA isn't sufficient. Neither was the fact the trustee explicitly knew about the claim then subject to litigation. If the claim wasn't scheduled on the asset schedule, it wasn't abandoned, the BAP held. So when the disputed claim ripened into a sum of money, it belonged to the estate, not the debtors. Start with the statute Property comes into the estate automatically upon the filing of a case. Section 541 begins (a)The commencement of a case under section 301, 302, or 303 of this title creates an estate. Such estate is comprised of all the following property, wherever located and by whomever held: Property can depart the estate by exemption, sale, or abandonment. Section 554 (c) was at the heart … [Continue reading...]
