Property of the estate

On Behalf of | Sep 14, 2010 | Bankruptcy |

In Bradley v. Gressett, the Chapter 7 Trustee sued Gressett under Texas law for conspiring with the debtor to fraudulently transfer property out of the estate of the debtor.  The district court granted a motion for summary judgment in favor of Gressett and held that the Trustee lacked standing to bring such a claim.  The Court reiterated that a trustee does not have standing to bring a tort claim that belongs exclusively to creditors of an estate.  The Court agreed with the Eight Circuit that the strong-arm clause did not overrule a previous case.

The Court clarified that a trustee is not authorized to collect assets unless these are owed to the estate.  
The Trustee argued that the claim it sought would remedy all creditors.  The Court focused on the distinction between claims that are “personal” to some creditors and those “general” to all arises after it is determined whether such claims are “properly assertable by the debtor or creditor, and not as a substitute for the analysis itself.”