.jpg)
treatment of insurance "book of business" in chapter 7 case
Hello Everyone:
I have a ch 7 question. A client, who owns an insurance agency, filed for ch 7 bk. The client's business basically consists of what's called a "book of business" where the client spends 8-9 hours every day calling the existing clients to explain the services and to make sure the clients are happy. Otherwise, they could swith to another agency. At a recent 341 hearing in WH, the trustee asked the client about the number of policies in existence in 2008 that were renewed in 2009. The client gave an approximate figure and based on that the trustee is now stating that the 2010 renewals for any policy existing on the date of filing are part of the bk estate. I reviewed the code defining "property of the estate" and subsection (6) states that the property of estate includes "Proceeds, product, offspring, rents, or profits of or from property of the estate, except such as are earnings from services performed by an individual debtor after the commencement of the case." The client is stating that in order for 90% of the exisitng policies to be renewed, he needs to "service" each policy by calling the clients every day, explaining different products, offering better terms, and doing everything to keep them happy and to ensure another renewal. Unless, I'm misreading the code section, I want to let the trustee know that because the client needs to spent his time and labor on most of these policies to ensure renewals, the renewals should NOT be considered part of bk estate per language of subsection 6. Did anyone have a similar experience or know how to handle it? I need to provide the information to trustee by next week. Any advice will be greatly appreciated.
Sofya Davtyan
The post was migrated from Yahoo.