Thursday, November 29, 2012

Bankruptcy Law, The Law of Debtors and Creditors Problem Set Answers, Warren Westbrook Sixth Edition - Problem Set 5

Problem Set 5, p.136

A. Yes; offspring is also property; §541(a)(6).
B. Yes;
  • Other than the human beings, all other things are property. We will exempt other things based on the public policy.
  • What is the value of this car? Let’s suppose it is $4990, and is secured for $5K. It is still the property of estate, because it is property.
  • Because the debtor has zero equity in it, there is no value to the estate.
C. No.
  • Snapshots don't have real value, only an extortionist value and may degrade the people that are in the pictures.
D. Yes.
E. Yes, but are exempt under §522.
F. Yes; dividends are proceeds under §541(a)(6).
  • Does it depend on that his uncle left to him? Spendthrift trust is an exemption; it cannot alienate. If the stock is the spendthrift trust, how about the dividends?
  • There is a controversy whether the dividends of the spendthrift trust are part of the estate. If they are, does this undermine the importance that spendthrift trust is not a part of the estate?
G. Yes.
H. Yes.
I. It depends.
  • On the state property laws under which who owns the glove? If it is the debtor’s glove, no matter who possesses it, it is still the property of the estate.
J. No. Account for which he acts as the trustee is not part of the estate. §541(b)(1).
K. Yes.
  • Salary for month prior is part of the state regardless of when check was received
L. Retirement income not part of the estate. §541(b)(7).
M. The wage after the filing is not the property and his employer’s contribution to his IRA is also not.

  • The debtor got the money. Post-petition earnings

  • March 1 sold; April 1 filed for bankruptcy. On March 1: $10; April 1: $15; May 1: $20; $150,000 belongs to the estate, and the other $50K belongs to Frances???
  • Farmer’s contract is part of the estate. The trust has an equitable and legal right to enforce the contract.
  • But what if Frances refuses to harvest the wheat since she doesn't own the wheat? She was under contractual obligation. But the bankruptcy estate now owns the contract. Would the trustee hire Frances to harvest it?

5.4Spendthrift trust provision. Trust is protected from creditors.

5.5The professor got the award; it is earned after the filing. But the TIB can argue that this is product of the pre-filing work, so it should be the property of the estate.

5.6Yes. The license has enormous value to the estate, like the brothel license case.

Problem Sets: Table of Contents

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