I represent a client who was owed a significant amount of money, about $150,000. We filed suit and shortly thereafter the defendant filed Ch. 7 bankruptcy. The trustee discovered that the defendant owed a piece of property without a mortgage. The trustee hired a realtor, sold the property, and distributed nearly $200,000 pro rata among all of the creditors. My client got a nice chunk of that money.
Then, after that money was distributed, the trustee filed additional paperwork with the bankruptcy court indicating that an additional $0.49 remained in his bank account due to an accounting error. That money should have been distributed to the creditors. The final paragraph of the trustee's report indicated that supplemental distribution checks were printed for the creditors but were made payable to the U.S. Bankruptcy Court pursuant to FRBP 3010. The attachment listed my client as being owed $0.15 of that money.
I had to look up Rule 3010, which provides as follows:
"(a) Chapter 7 Cases. In a chapter 7 case no dividend in an amount less than $5 shall be distributed by the trustee to any creditor unless authorized by local rule or order of the court. Any such dividend not distributed to a creditor shall be treated in the same manner as unclaimed funds as provided in § 347 of the Code."
Section 347 talks about unclaimed property. That section sets forth certain timelines, after which any unclaimed money is "paid into the court." That makes sense. It also makes sense that trustees should not have to spend their own time and money dealing with amounts less than $5.00.
But, I was unaware of the rule. So, I looked it up, did some reading, reviewed the trustee's supplemental report, emailed my client, spent about $200.00 in billable time, and eventually determined that my client wasn't going to get its $0.15; and, therefore, I wasn't going to get my nickel.
There are some interesting points in time in this article but I don?t know if I see all of them center to heart. There is some validity but I will take hold opinion until I look into it further. Good article , thanks and we want more! Added to FeedBurner as well
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