Here is a nonexclusive list of some common rights and causes of action included in the bankruptcy estate.
1. Contract rights: A bankruptcy debtor?s contract rights against a third party are included in the bankruptcy estate, even if those rights are contingent and transferable.
2. Causes of action and claims for relief: A bankruptcy debtor?s causes of action and claims for relief arising prepetition causes includible in the bankruptcy estate. This includes debtor?s personal injury claim, even if the claim is not assignable under state law. The debtor has no authority to settle and release a personal injury action postpetition. Only the bankruptcy trustee (or Debtor in Possession) has authority postpetition to do so. But, a personal injury claim, as well as amounts recovered under that claim, might be exempt under state law. Postpetition claims of this nature are not property of the bankruptcy estate. Emotional distress Claims constitute estate property even where estate law prohibits the creditors from reaching the claim. Moreover, a debtor?s claim for termination of employment due to discrimination is included in the estate. Also, legal malpractice claims arising prepetition, are considered bankruptcy estate property. Breach of fiduciary duty claims. If the bankruptcy trustee or the debtor in possession is not wiling to pursue such claims, the creditors may pursue the claim if authorized by the court. Alter Ego Claims. To determine whether a debtor?s cause of action on an alter ego theory should be included in the bankruptcy estate, depends on state law. California, for instance, recognizes two types of alter ego claims: (1) The Generalized Claim; and (2) The Particularized Claim.
A ?Generalized? alter ego claim occurs when the liability of the debtor is to each creditor of the corporation. These claims are property of the estate and only the bankruptcy trustee may assert them.
A ?Particularized? claim occurs when the claimant is harmed and no other claimant or creditor has an interest in the cause. Since a particularized claim belongs to an individual creditor it is not considered property of the bankruptcy estate and cannot be asserted by the bankruptcy trustee.
If you have any questions regarding Contract Rights and Causes of Action included in the Bankruptcy Estate or any other questions related to Bankruptcy please call Joseph S. Pearl at 661-281-0253.
DISCLAIMER: This article and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.
Joseph S. Pearl, LL.M. ? A Professional Law Corporation
1400 Chester Ave., Suite C
Bakersfield, CA 93301
661-281-0253
Joseph S. Pearl, LL.M. ? A Professional Law Corporation
1400 Chester Ave., Suite C
Bakersfield, CA 93301
661-281-0253
Source: http://www.maxref.com/common-contract-rights-and-causes-of-action-included-in-the-bankruptcy-estate
No comments:
Post a Comment