Title | Kim Memorandum Opinion, Case No. 21-12870-MCR |
Judge |
Maria Ellena Chavez-Ruark
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Entered |
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Case Number |
21-12870
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Summary |
The United States Trustee and a non-debtor co-owner of property of the estate objected to the Chapter 7 Trustee’s application for compensation because the Chapter 7 Trustee included sale proceeds distributed to the non-debtor co-owner when calculating her fees under 11 U.S.C. § 326. The United States Trustee maintained that the Chapter 7 Trustee was not entitled to a commission under Section 326(a) on proceeds distributed to the non-debtor co-owner for her interest in property sold by the Chapter 7 Trustee during the case, citing to 11 U.S.C. § 363(j) which requires a trustee to distribute sale proceeds less costs and expenses, not including any compensation of the trustee, according to the co-owner’s interest in the property sold. The Court determined that a plain reading of Sections 363(j) and 326(a) reveals that the two provisions are not mutually exclusive as the United States Trustee appeared to suggest. Rather, a court can – and should – apply both provisions in a situation such as the one presented because they involve different calculations and have different purposes. Section 363(j) governs the distribution of sale proceeds to the bankruptcy estate and any co-owners of the property sold while Section 326(a) governs the calculation of the trustee’s compensation. A co-owner can receive his or her share of the sale proceeds in accordance with Section 363(j) and those proceeds can then be included in the calculation of a trustee’s compensation because they were “disbursed” by the trustee as described in Section 326(a). The Court concluded that the statutes do not present an “either/or” scenario. |
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