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From the Editor – Property of Estate and Exemptions
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By The Honorable William Houston Brown (Retired)
Property of Chapter 7 estate included pre-conversion settlement. After conversion to Chapter 7, debtors sued their bankruptcy attorney, who represented them in Chapter 11, and the Chapter 7 trustee intervened to assert that the proceeds would be property of the Chapter 7 estate. The malpractice claim was settled, with proceeds deposited into the court registry. The Fifth Circuit said that the outcome was dependent on timing under § 1115(a)(1). Under the 2005 amendment to that section, property of the estate includes property that the individual Chapter 11 . . .
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