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Broker merely had listing prepetition and trustee is asking for entire commission
Steve, Here is a little bit of tinsel on top of the gold bar:
unless the client is actually the BROKER of record, rather than just an employee/sales person of the brokerage, he or she doesnt have any property interest or account receivable in the listing, and if there is a contractual interest, ie. specifying the compensation if the house sells, that could govern the Trustees rights, i.e. the asset that Debtor had at the time of the filing. Ordinarily, it would say that employee has no right to any compensation unless and until the sale closes. Might be useful in the discussion.
Jason
CONFIDENTIAL COMMUNICATION
ATTORNEY-CLIENT PRIVILEGE
JASON WALLACH, ESQ.
Gladstone Michel Weisberg Willner & Sloane, ALC
4551 Glencoe Avenue, Suite 300
Marina del Rey CA 90292-7925
Tel: (310) 821-9000
Direct: (310) 775-8725
Fax: (310) 775-8775
Email: jwallach@gladstonemichel.com
www. gladstonemichel.com
NOTE: The information contained in this email may contain attorney-client
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On Jan 12, 2015, at 1:45 PM, 'Steven B. Lever' sblever@leverlaw.com [cdcbaa] wrote:
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> Wow Nick. That answer is solid gold and every one of this list should put it somewhere in their knowledge base. Thank you. Steve
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> Sent: Sunday, January 11, 2015 7:49 PM
> To: cdcbaa@yahoogroups.com
> Cc: ngebelt@goodbye2debt.com
> Subject: [cdcbaa] RE: Broker merely had listing prepetition and trustee is asking for entire commission
> Importance: High
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> Dear Steve,
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> Three cases that may be helpful are In re Fitzsimmons, 725 F. 2d 1208 (9th Cir. 1984), In re Ryerson, 739 F. 2d 1423 (9th Cir. 1984), and In re Wu, 173 B.R. 411 (B.A.P. 9th Cir. 1994).
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> In Fitzsimmons the debtor, a sole practitioner attorney, filed a Chapter 11. Prior to filing the debtor had a contingency-fee case pending on which he did postpetition work. For reasons not mentioned, the Court appointed a Chapter 11 Trustee. The Bankruptcy Court entered an order requiring the debtor to remit all of the proceeds from the case to the Trustee. The Debtor appealed, claiming that the portion of the proceeds that were attributable to postpetition services performed fell under the language in 11 U.S.C. ces performed by an individual debtor after the commencement of the case.he Trustee appealed. The Ninth Circuit held:
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> The Bankruptcy Appellate Panel reversed the decision of the Bankruptcy Court insofar as it holds that post-bankruptcy earnings from services performed by an individual debtor are property of the estate in a Chapter 11 case. . . . The decision of the Bankruptcy Appellate Panel is affirmed.
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> In re Fitzsimmons, 725 F. 2d at 1212 (emphasis added).
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> The key here is that earnings from services actually performed postpetition are not property of the estate except, of course, in a Chapter 13 because of 1306(a)(2) and must be distinguished from y of the estate . . . Thus, a court must determine which portion of the income is from services performed postpetition (to which the debtor is entitled), and which is merely offspring of assets already in the estate.
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> See also In re Ryerson, 739 F. 2d 1423 (9th Cir. 1984) (Chapter 7 debtorpostpetition service compensation).
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> In Wu the Chapter 7 debtor was an insurance agent who had sold policies prepetition. She was entitled to policy renewal commissions for those policy holders who renewed their coverage. The Chapter 7 Trustee demanded turnover of all the money. In its summary of the relevant facts, the B.A.P. stated:
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> [T]he bankruptcy court determined that the renewal commissions were not property of the estate because the payment of the commissions depended upon postpetition services by the debtor and the commission payment structure adopted by the Career Agent Agreement reflects that the renewal commissions are allocated to services performed postpetition.
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> In re Wu, 173 B.R. at 413.
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> In addressing the Trustees claim to all of the money, the B.A.P. held:
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> This all or nothing approach is inconsistent with FitzSimmons and Ryerson, which, in evaluating earnings having both a prepetition and a postpetition component, caution us to determine the extent to which the earnings are attributable to prepetition property or prepetition services. The proper analysis under Ryerson and FitzSimmons is to first determine whether any postpetition services are necessary to obtaining the payments at issue. If not, the payments are entirely rooted in the pre-bankruptcy past estate. If some postpetition services are necessary, then courts must determine the extent to which the payments are attributable to the postpetition services and the extent to which the payments are attributable to prepetition services. That portion of the payments allocable to postpetition services will not be property of the estate. That portion of the payments allocable to prepetition services or property will be property of the estate.
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> In re Wu, 173 B.R. at 414-15.
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> In sum, your burden is to establish the portion of the commissions that are attributable to postpetition services performed by your client because that is the portion that belongs to your client. If the only thing that existed prepetition was the listing, then your client clearly had to perform postpetition services to get the commissions. While your client has poor records, he must have some dated documents showing that the escrow opened postpetition. Does his employer have records that can be used to establish that the house hadnt been shown to anyone prepetition? You may have to use a real estate broker as an expert witness to testify to the services an agent must perform to sell a house. If the house hadnt been shown prepetition, then none of those services were performed prepetition. >
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> Finally, try negotiating with the Trustee. Let the Trustee know about the holdings inFitzsimmons, Ryerson, and Wu, and point out that any litigation will squander at least some of the money. Why not agree to an apportionment without litigation? While your client might not be too thrilled about giving up any of the money, he may need a reality check: litigation is expensive.
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> Good luck,
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> Nick
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> Nicholas Gebelt
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> Nicholas Gebelt, Ph.D., J.D.
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> Attorney at Law
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> Law Offices of Nicholas Gebelt
>
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> Sent: Sunday, January 11, 2015 5:23 PM
> To: cdcbaa@yahoogroups.com
> Subject: [cdcbaa] Broker merely had listing prepetition and trustee is asking for entire commission
>
>
>
>
>
> List mates:
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>
>
> I have a broker who merely had a listing prepetition---- postpetition he opened the escrows and eventually sold the properties and received about a $20,000 commission. We had to take the 704 exemptions so no part can be exempted.
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> The Trustee has demanded all the commission received.
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> I know I can argue it should be apportioned and that there were costs. My client of course did not keep time records, and his accounting is nonexistent.
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> I have not been able to find any law in a case where a court made the apportionment.
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> Any experience or ideas to share would be appreciated.
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> Thank you
>
>
>
> Steve
>
>
>
> Law Offices of Steven B. Lever
>
> >
>
> > Steven B. Lever
>
> >( Tel. (562) 436-5456 ext. 1
>
> >( Fax (562) 485-6886
>
> >* sblever@leverlaw.com
>
> > www.leverlaw.com
>
>
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>
Steve, Here is a little bit of tinsel on top of the gold bar:unless the client is actually the BROKER of record, rather than just an employee/sales person of the brokerage, he or she doesnt have any property interest or account receivable in the listing, and if there is a contractual interest, ie. specifying the compensation if the house sells, that could govern the Trustees rights, i.e. the asset that Debtor had at the time of the filing. Ordinarily, it would say that employee has no right to any compensation unless and until the sale closes. Might be useful in the discussion.Jason
CONFIDENTIAL COMMUNICATIONATTORNEY-CLIENT PRIVILEGE-- JASON WALLACH, ESQ.Gladstone Michel Weisberg Willner & Sloane, ALC4551 Glencoe Avenue, Suite 300Marina del Rey CA 90292-7925Tel: (310) 821-9000Direct: (310) 775-8725Fax: (310) 775-8775Email: jwallach@gladstonemichel.comwww. gladstonemichel.comNOTE: The information contained in this email may contain attorney-clientprivileged and confidential information intended only for the use of theindividual or entity named above. If the reader of this message is notthe intended recipient, or the employee or agent responsible to deliverit to the intended recipient, you are hereby notified that anydissemination, distribution or copying of this communication is strictlyprohibited. If you have received this communication in error, pleasenotify us immediately by email and delete the original message.
On Jan 12, 2015, at 1:45 PM, 'Steven B. Lever' sblever@leverlaw.com [cdcbaa] <cdcbaa@yahoogroups.com> wrote:In re Wu, 173 B.R. at 413. In addressing the Trusteesize: 0px; line-height: 1.22em;"> ngebelt@goodbye2debt.com; info@gebeltlaw.com and destroy the original message and all copies. Representation Note: If you have not signed a contract of representation, the Law Offices of Nicholas Gebelt do not represent you, and this email does not contain any legal advice for you. IRS Circular 230 Disclosure: In order to comply with the requirements imposed by the Internal Revenue Service, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue code, or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.
The post was migrated from Yahoo.
List mates:
I have a broker who merely had a listing prepetition---- postpetition he
opened the escrows and eventually sold the properties and received about
a $20,000 commission. We had to take the 704 exemptions so no part can
be exempted.
The Trustee has demanded all the commission received.
I know I can argue it should be apportioned and that there were costs.
My client of course did not keep time records, and his accounting is
nonexistent.
I have not been able to find any law in a case where a court made the
apportionment.
Any experience or ideas to share would be appreciated.
Thank you
Steve
Law Offices of Steven B. Lever
>
> Steven B. Lever
>( Tel. (562) 436-5456 ext. 1
>( Fax (562) 485-6886
>* sblever@leverlaw.com
> www.leverlaw.com
The post was migrated from Yahoo.