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How do you exempt an asset of unknown value? More to worry about.
If the lawsuit is pending, we disclose the claims made or causes of
action asserted, the case number, the court, and the most recent
dispositions in the case, as well as giving the state court lawyer
notice of the filing (because he may have an attorney lien), as well
as counsel for the defendant. We further state that the value is
based ultimately on the outcome of litigation and is a estimation
subject to proof. Make sure that you include in the SOFA, even though
the debtor is the plaintiff.
Lou Esbin
>
> We always add a disclaimer that "the value listed herein is for
> exemption purposes only and does not reflect the value the debtor is
> placing on the claim which is unknown at this time." I, too believe
> this puts the onus on the Tee. However, we did have a creditor try to
> use the claimed exemption amount in a judicial estoppel argument in
> state court - they lost but it required additional declarations on our
> part.
>
>
>
> M. Erik Clark
> Borowitz, Lozano & Clark, LLP
> 100 N. Barranca Avenue, Suite 250
> West Covina, CA 91791
>
> www.blclaw.com
> Office: (626) 332-8600
> Fax: (626) 332-8644
> Board Certified in Consumer Bankruptcy
> American Board of Certification
>
> ________________________________
>
> Of Kenneth Jay Schwartz
> Sent: Friday, May 30, 2008 10:30 AM
> To: cdcbaa@yahoogroups.com
> Subject: Re: [cdcbaa] How do you exempt an asset of unknown value? More
> to worry about.
>
>
>
> Lowballing the figure on Schedule "B" also runs the risk
> that the defendant will claim a judicial estoppel in the
> underlying action, or, purchase the claim from the trustee
> for the stated lawballed amount.
>
> --- "Joseph E. Caceres" wrote:
>
> > We list them at the highest number possible, exempt it
> > all, and put a notation on Schedules B and C that debtor
> > believes value is probably less but is overvaluing the
> > asset to highlight the exemption. I suppose you could
> > put a further disclaimer that you are using the higher
> > number to preserve the exemption. Onus is then on
> > trustee to investigate the real value, and if debtor is
> > correct that it is worth less than the precautionary
> > amount listed, trustee presumably won't go after the
> > asset (assuming asset really exempt, etc.etc.).
> >
> >
> > Joseph E. Caceres, Esq.
> > Caceres & Shamash, LLP
> > 8383 Wilshire Blvd., Suite 1010
> > Beverly Hills, CA 90211-2409
> > Tel: (323) 852-1600, x102
> > Fax: (323) 852-9009
> > E-mail: jec@...
> > ----- Original Message -----
> > To: cdcbaa@yahoogroups.com
> > Sent: Friday, May 30, 2008 9:51 AM
> > Subject: [cdcbaa] How do you exempt an asset of unknown
> > value? More to worry about.
> >
> >
> > Barroso-Herrans v. Lugo-Mender (In re Barroso-Herrans)
> > 524 F.3d 341
> > (1st Cir., May, 2008)
> >
> > Issue: When the chapter 7 debtor lists, as an asset, a
> > lawsuit and
> > values it at $4,000 and claims the $4,000 exempt, is
> > the entire asset
> > exempt or only $4,000?
> >
> > Holding: Only $4,000 is exempt.
> >
> > Appeal from District Court
> >
> > At the time of the petition, the debtor had a lawsuit
> > pending for
> > damages. The damages included accounts receivable owed
> > to the debtor
> > which was separately listed as an asset with a value of
> > about
> > $170,000. The debtor valued the lawsuit on his schedule
> > B at $4,000
> > and claimed the $4,000 exempt. Later, the trustee
> > settled the case
> > for about $100,000, which included resolution of the
> > accounts
> > receivable. The debtor claimed all of the funds arguing
> > that he had
> > claimed the asset, the suit, to be exempt in its
> > entirety and that
> > the trustee had not objected to the exemption. The
> > bankruptcy court
> > held that only $4,000 was exempt. The District Court
> > affirmed.
> >
> > The 1st Circuit also affirmed. "The threshold question
> > of what has
> > been claimed calls for interpreting the schedules filed
> > by the
> > debtors. To start, we ask how a reasonable trustee
> > would have
> > understood the filings under the circumstances." "[T]he
> > $4,000 sum
> > appears to be an implausible full valuation for law
> > suits seeking to
> > collect a vastly greater amount-over $4 million-from a
> > government
> > authority for unpaid invoices." "Had [the debtor]
> > listed the value
> > of the suits as `unknown'-as the debtor did in
> > Taylor-or used a
> > nominal sum like $1 as a placeholder, he would have a
> > much stronger
> > argument. `Use of terms like `100% [of the property's
> > value],' `unknown,' `to be determined,' `tba' and
> > `$1.00' are red
> > flags to trustees and creditors,' 1 Collier on
> > Bankruptcy P. 8.06(1)
> > (c)(ii) (15th ed. rev.2007), and therefore put them on
> > notice that if
> > they do not object, the whole value of the
> > asset-whatever it might
> > later turn out to be-will be exempt." "It is enough to
> > resolve this
> > case that the trustee's reading of the exemptions as
> > limited to a
> > $4,000 share of the proceeds from each law suit is
> > objectively
> > reasonable."
> >
> > Note: I don't think listing the value as "unknown" and
> > then
> > exempting it does you much good in the 9th Circuit.
> >
> >
> >
> >
>
> Kenneth Jay Schwartz, Esq.
> LAW OFFICE OF KENNETH JAY SCHWARTZ
> 21031 Ventura Boulevard, 12th Floor
> Woodland Hills, California 91364-2203
> Telephone: (818) 226-1205
> Facsimile: (818) 226-1213
>
The post was migrated from Yahoo.
charset="US-ASCII"
We always add a disclaimer that "the value listed herein is for
exemption purposes only and does not reflect the value the debtor is
placing on the claim which is unknown at this time." I, too believe
this puts the onus on the Tee. However, we did have a creditor try to
use the claimed exemption amount in a judicial estoppel argument in
state court - they lost but it required additional declarations on our
part.
M. Erik Clark
Borowitz, Lozano & Clark, LLP
100 N. Barranca Avenue, Suite 250
West Covina, CA 91791
www.blclaw.com
Office: (626) 332-8600
Fax: (626) 332-8644
Board Certified in Consumer Bankruptcy
American Board of Certification
________________________________
The post was migrated from Yahoo.
Lowballing the figure on Schedule "B" also runs the risk
that the defendant will claim a judicial estoppel in the
underlying action, or, purchase the claim from the trustee
for the stated lawballed amount.
> We list them at the highest number possible, exempt it
> all, and put a notation on Schedules B and C that debtor
> believes value is probably less but is overvaluing the
> asset to highlight the exemption. I suppose you could
> put a further disclaimer that you are using the higher
> number to preserve the exemption. Onus is then on
> trustee to investigate the real value, and if debtor is
> correct that it is worth less than the precautionary
> amount listed, trustee presumably won't go after the
> asset (assuming asset really exempt, etc.etc.).
>
>
> Joseph E. Caceres, Esq.
> Caceres & Shamash, LLP
> 8383 Wilshire Blvd., Suite 1010
> Beverly Hills, CA 90211-2409
> Tel: (323) 852-1600, x102
> Fax: (323) 852-9009
> E-mail: jec@locs.com
> ----- Original Message -----
> To: cdcbaa@yahoogroups.com
> Sent: Friday, May 30, 2008 9:51 AM
> Subject: [cdcbaa] How do you exempt an asset of unknown
> value? More to worry about.
>
>
> Barroso-Herrans v. Lugo-Mender (In re Barroso-Herrans)
> 524 F.3d 341
> (1st Cir., May, 2008)
>
> Issue: When the chapter 7 debtor lists, as an asset, a
> lawsuit and
> values it at $4,000 and claims the $4,000 exempt, is
> the entire asset
> exempt or only $4,000?
>
> Holding: Only $4,000 is exempt.
>
> Appeal from District Court
>
> At the time of the petition, the debtor had a lawsuit
> pending for
> damages. The damages included accounts receivable owed
> to the debtor
> which was separately listed as an asset with a value of
> about
> $170,000. The debtor valued the lawsuit on his schedule
> B at $4,000
> and claimed the $4,000 exempt. Later, the trustee
> settled the case
> for about $100,000, which included resolution of the
> accounts
> receivable. The debtor claimed all of the funds arguing
> that he had
> claimed the asset, the suit, to be exempt in its
> entirety and that
> the trustee had not objected to the exemption. The
> bankruptcy court
> held that only $4,000 was exempt. The District Court
> affirmed.
>
> The 1st Circuit also affirmed. "The threshold question
> of what has
> been claimed calls for interpreting the schedules filed
> by the
> debtors. To start, we ask how a reasonable trustee
> would have
> understood the filings under the circumstances." "[T]he
> $4,000 sum
> appears to be an implausible full valuation for law
> suits seeking to
> collect a vastly greater amount-over $4 million-from a
> government
> authority for unpaid invoices." "Had [the debtor]
> listed the value
> of the suits as `unknown'-as the debtor did in
> Taylor-or used a
> nominal sum like $1 as a placeholder, he would have a
> much stronger
> argument. `Use of terms like `100% [of the property's
> value],' `unknown,' `to be determined,' `tba' and
> `$1.00' are red
> flags to trustees and creditors,' 1 Collier on
> Bankruptcy P. 8.06(1)
> (c)(ii) (15th ed. rev.2007), and therefore put them on
> notice that if
> they do not object, the whole value of the
> asset-whatever it might
> later turn out to be-will be exempt." "It is enough to
> resolve this
> case that the trustee's reading of the exemptions as
> limited to a
> $4,000 share of the proceeds from each law suit is
> objectively
> reasonable."
>
> Note: I don't think listing the value as "unknown" and
> then
> exempting it does you much good in the 9th Circuit.
>
>
>
>
Kenneth Jay Schwartz, Esq.
LAW OFFICE OF KENNETH JAY SCHWARTZ
21031 Ventura Boulevard, 12th Floor
Woodland Hills, California 91364-2203
Telephone: (818) 226-1205
Facsimile: (818) 226-1213
The post was migrated from Yahoo.
We list them at the highest number possible, exempt it all, and put a notation on Schedules B and C that debtor believes value is probably less but is overvaluing the asset to highlight the exemption. I suppose you could put a further disclaimer that you are using the higher number to preserve the exemption. Onus is then on trustee to investigate the real value, and if debtor is correct that it is worth less than the precautionary amount listed, trustee presumably won't go after the asset (assuming asset really exempt, etc.etc.).
Joseph E. Caceres, Esq.
Caceres & Shamash, LLP
8383 Wilshire Blvd., Suite 1010
Beverly Hills, CA 90211-2409
Tel: (323) 852-1600, x102
Fax: (323) 852-9009
E-mail: jec@locs.com
----- Original Message -----
To: cdcbaa@yahoogroups.com
Sent: Friday, May 30, 2008 9:51 AM
Subject: [cdcbaa] How do you exempt an asset of unknown value? More to worry about.
Barroso-Herrans v. Lugo-Mender (In re Barroso-Herrans) 524 F.3d 341
(1st Cir., May, 2008)
Issue: When the chapter 7 debtor lists, as an asset, a lawsuit and
values it at $4,000 and claims the $4,000 exempt, is the entire asset
exempt or only $4,000?
Holding: Only $4,000 is exempt.
Appeal from District Court
At the time of the petition, the debtor had a lawsuit pending for
damages. The damages included accounts receivable owed to the debtor
which was separately listed as an asset with a value of about
$170,000. The debtor valued the lawsuit on his schedule B at $4,000
and claimed the $4,000 exempt. Later, the trustee settled the case
for about $100,000, which included resolution of the accounts
receivable. The debtor claimed all of the funds arguing that he had
claimed the asset, the suit, to be exempt in its entirety and that
the trustee had not objected to the exemption. The bankruptcy court
held that only $4,000 was exempt. The District Court affirmed.
The 1st Circuit also affirmed. "The threshold question of what has
been claimed calls for interpreting the schedules filed by the
debtors. To start, we ask how a reasonable trustee would have
understood the filings under the circumstances." "[T]he $4,000 sum
appears to be an implausible full valuation for law suits seeking to
collect a vastly greater amount-over $4 million-from a government
authority for unpaid invoices." "Had [the debtor] listed the value
of the suits as `unknown'-as the debtor did in Taylor-or used a
nominal sum like $1 as a placeholder, he would have a much stronger
argument. `Use of terms like `100% [of the property's
value],' `unknown,' `to be determined,' `tba' and `$1.00' are red
flags to trustees and creditors,' 1 Collier on Bankruptcy P. 8.06(1)
(c)(ii) (15th ed. rev.2007), and therefore put them on notice that if
they do not object, the whole value of the asset-whatever it might
later turn out to be-will be exempt." "It is enough to resolve this
case that the trustee's reading of the exemptions as limited to a
$4,000 share of the proceeds from each law suit is objectively
reasonable."
Note: I don't think listing the value as "unknown" and then
exempting it does you much good in the 9th Circuit.
The post was migrated from Yahoo.
Barroso-Herrans v. Lugo-Mender (In re Barroso-Herrans) 524 F.3d 341
(1st Cir., May, 2008)
Issue: When the chapter 7 debtor lists, as an asset, a lawsuit and
values it at $4,000 and claims the $4,000 exempt, is the entire asset
exempt or only $4,000?
Holding: Only $4,000 is exempt.
Appeal from District Court
At the time of the petition, the debtor had a lawsuit pending for
damages. The damages included accounts receivable owed to the debtor
which was separately listed as an asset with a value of about
$170,000. The debtor valued the lawsuit on his schedule B at $4,000
and claimed the $4,000 exempt. Later, the trustee settled the case
for about $100,000, which included resolution of the accounts
receivable. The debtor claimed all of the funds arguing that he had
claimed the asset, the suit, to be exempt in its entirety and that
the trustee had not objected to the exemption. The bankruptcy court
held that only $4,000 was exempt. The District Court affirmed.
The 1st Circuit also affirmed. "The threshold question of what has
been claimed calls for interpreting the schedules filed by the
debtors. To start, we ask how a reasonable trustee would have
understood the filings under the circumstances." "[T]he $4,000 sum
appears to be an implausible full valuation for law suits seeking to
collect a vastly greater amount-over $4 million-from a government
authority for unpaid invoices." "Had [the debtor] listed the value
of the suits as `unknown'-as the debtor did in Taylor-or used a
nominal sum like $1 as a placeholder, he would have a much stronger
argument. `Use of terms like `100% [of the property's
value],' `unknown,' `to be determined,' `tba' and `$1.00' are red
flags to trustees and creditors,' 1 Collier on Bankruptcy P. 8.06(1)
(c)(ii) (15th ed. rev.2007), and therefore put them on notice that if
they do not object, the whole value of the asset-whatever it might
later turn out to be-will be exempt." "It is enough to resolve this
case that the trustee's reading of the exemptions as limited to a
$4,000 share of the proceeds from each law suit is objectively
reasonable."
Note: I don't think listing the value as "unknown" and then
exempting it does you much good in the 9th Circuit.
The post was migrated from Yahoo.