In re Blixseth

Summarized by:

  • Court: 9th Circuit Court of Appeals Archives
  • Area(s) of Law: Bankruptcy Law
  • Date Filed: 06-21-2012
  • Case #: 11-60042
  • Judge(s)/Court Below: Per Curiam; Circuit Judges Gould, Bybee and Bea
  • Full Text Opinion

"11 U.S.C. § 362(h) combined with § 521(a)(2) lifts an automatic stay and removes personal property from the estate without a timely filing of a statement of intention and a motion to determine value or benefit of property by the trustee."

Edra Blixseth guaranteed a $12,650,000 loan, using personal property as collateral, to Western Capital Partners, LLC (“Western Capital”) for her son. Blixseth’s chapter 11 relief filing was converted to a chapter 7 case, a trustee was assigned, and the bankruptcy schedules were amended to correct the value of personal property assets listed. Western Capital remained listed as a secured creditor in Blixseth’s schedule. Blixseth failed to file a “statement of intention regarding the collateral as required by 11 U.S.C. § 521(a)(2)(A).” Further, the chapter 7 trustee failed to file the necessary motion for “determination of consequential value or benefit under 11 U.S.C. § 362(h)(2).” The bankruptcy court granted Western Capital’s motions for relief from the automatic stay, holding that “§ 362(h) provided Western Capital mandatory relief.” The chapter 7 trustee then filed a motion to enforce the automatic stay, contending that property to be sold was protected by the automatic stay, which was never terminated by § 362(h) on “all Collateral, but only terminated on personal property identified on the Debtor’s Schedules.” The bankruptcy court denied the motion to enforce, on the basis that “§ 362(h) terminated the automatic stay on the collateral regardless of whether it was listed on the Schedules.” The chapter 7 trustee appealed. The issue before the Ninth Circuit was one of statutory interpretation. Section 521(a)(2) does not require that property securing a debt be scheduled, but only listed. The Court further considered the unambiguous language in § 362(h), and held that “all personal property secured by a scheduled debt is released from the automatic stay if a debtor fails to timely file and comply with her statement of intention.” AFFIRMED.

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