In re Yelverton

477 B.R. 282, 2012 WL 3206242, 2012 Bankr. LEXIS 3648
CourtCourt of Appeals for the D.C. Circuit
DecidedAugust 8, 2012
DocketNo. 09-00414
StatusPublished
Cited by1 cases

This text of 477 B.R. 282 (In re Yelverton) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Yelverton, 477 B.R. 282, 2012 WL 3206242, 2012 Bankr. LEXIS 3648 (D.C. Cir. 2012).

Opinion

MEMORANDUM DECISION RE DEBTOR’S MOTION TO VACATE ORDER APPROVING SETTLEMENT

S. MARTIN TEEL, JR., Bankruptcy Judge.

The debtor has filed a Motion to Vacate Order and for New Trial As to Trustee’s Settlement. The motion seeks to set aside this court’s approval of a settlement that the chapter 7 trustee reached with certain entities (“the Defendants”) with whom the debtor (and then the trustee in place of the debtor) had been engaged in litigation concerning the debtor’s shares in Yelverton Farms, Ltd. and other claims. The motion will be denied for the following reasons.

I

Among other things, the settlement called for the trustee to endorse in blank his shares in Yelverton Farms, Ltd. and transfer possession of such shares to the Defendants. The debtor argues that the settlement cannot be approved because his ex-wife, Alexandra N. Senyi de Nagy-Unyom, has an ownership interest in those shares pursuant to her statutory right of equitable distribution under D.C.Code § 16-910 in a divorce proceeding between the debtor and her that was commenced before the filing of the debtor’s bankruptcy petition. The Superior Court for the District of Columbia issued a judgment of divorce postpetition, but has not yet entered a § 16-910 decree. D.C.Code § 16-910, provides in relevant part:

upon entry of a final decree of ... divorce, ... and the filing of a petition for relief available under this section, in the absence of a valid antenup-tial or postnuptial agreement resolving all issues related to the property of the parties, the court shall:
(a) assign to each party his or her sole and separate property acquired prior to the marriage ... his or her sole and separate property acquired during the marriage ... by gift, bequest, devise, or descent, and any increase thereof, or property acquired in exchange therefor; and
(b) value and distribute all other property and debt accumulated during the marriage ... that has not been addressed in a valid antenuptial or post-nuptial agreement, or decree of legal separation, regardless of whether title is held individually or by the parties in the form of joint tenancy or tenancy by the [286]*286entireties, in a manner that is equitable, just, and reasonable, after considering all relevant factors, including, but not limited to:

[Twelve enumerated factors omitted.] [Emphasis added.]

A

In his opposition to the motion to approve the settlement, however, the debtor merely characterized Senyi as having non-dischargeable statutory spousal rights. Opposn. to Trustee’s Mtn. (Dkt. No. 464) 2, 14. Nondischargeability is a concept addressed to a creditor’s being barred from collecting a monetary claim against the debtor as a personal liability of the debtor, not to issues of ownership of property. Similarly, Senyi only asserted, by way of her proof of claim, a right to payment from the estate with respect to the debtor’s interest in Yelverton Farms, Ltd., and never filed a proceeding to assert an ownership interest in those shares.

To elaborate, a discharge under 11 U.S.C. § 727(a) discharges the debtor from debts that arose prepetition, 11 U.S.C. § 727(b), and gives rise to a discharge injunction under 11 U.S.C. § 524(a)(2) barring collection of the debt as a personal liability of the debtor unless the debt is excepted from discharge under 11 U.S.C. § 523 or the debt is reaffirmed under 11 U.S.C. § 524(c). A debt is a liability on a claim, and, in turn, a claim is a right to payment, or a “right to an equitable remedy for breach of performance if such breach gives rise to a right to payment....” 11 U.S.C. § 101(5). A creditor (which, under 11 U.S.C. § 101(10), in-eludes an entity holding a claim in existence on the bankruptcy petition date) may assert the creditor’s claim by filing a proof of claim against the estate. 11 U.S.C. § 501(a).

Filing a proof of claim is what Se-nyi did with respect to the debtor’s stock ownership in Yelverton Farms, Ltd. That entity owned a pig farm operation in North Carolina. Senyi filed a proof of claim that included a claim described as follows:

CLAIM DETAILS: 100,000$ FROM THE SALE OF THE YELVERTON PIG FARM OPERATION IN NORTH CAROLINA
Mr. Yelverton signed a notarized document on April 2, 2008, wherein he promised the first $100,000 in proceeds from the North Carolina Pig Farm Operation, to his wife Alexandra N. Senyi de Nagy-Unyom. The pig farm has not yet been sold, to the knowledge of Ms. Senyi.

The proof of claim attached the April 2, 2008 document in which Yelverton stated:

I, Stephen Thomas Yelverton, agree to give my wife, Alexandra-Nicole Senyi de Nagy-Unyom, the first $100,000 in proceeds that I receive from the sale of my interest in my family’s pig operation in North Carolina.

The debtor would have realized proceeds from the sale of his interest in the pig farm operation via a sale of his stock ownership in Yelverton Farms, Ltd. Accordingly, Senyi’s proof of claim was asserting a right to payment as a creditor with respect to the promissory note of April 2, 2008,1 relating to the debtor’s rights as a [287]*287shareholder in Yelverton Farms, Ltd. That a claim by Senyi against the estate based on spousal rights arising under D.C.Code § 16-910 might (as contended by the debt- or) be nondischargeable and unaffected by a discharge would have no impact on the liquidation of the estate, and would not affect whether the settlement ought to have been approved.

Senyi and the debtor never clearly articulated an argument that Senyi had an ownership interest in the debtor’s shares in Yelverton Farms, Ltd. After the court has already held a lengthy hearing to consider approval of the settlement agreement, and issued a decision approving the settlement at the conclusion of that hearing, it is too late for the debtor to inject a new issue into the proceeding.

B

In any event, any assertion that Senyi would eventually be entitled to an ownership interest in his Yelverton Farms, Ltd. shares is plainly in error.

First, the 2008 promissory note did not confer an ownership interest in Senyi. Indeed, in seeking to set aside the order approving the settlement, the debtor has not contended that his promise in 2008 “to give my wife ...

Free access — add to your briefcase to read the full text and ask questions with AI

Related

In re Yelverton
556 B.R. 1 (District of Columbia, 2016)

Cite This Page — Counsel Stack

Bluebook (online)
477 B.R. 282, 2012 WL 3206242, 2012 Bankr. LEXIS 3648, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-yelverton-cadc-2012.