IN RE: HOKULANI SQUARE, INC., a Hawaii corporation, Debtor, BRADLEY R TAMM, Chapter 7 Trustee, Appellant,
UST - UNITED STATES TRUSTEE, HONOLULU, Appellee
Argued and Submitted, Honolulu, Hawaii October 10, 2013.
Appeal from the Ninth Circuit, Bankruptcy Appellate Panel. BAP No. 10-1468. Pappas, Dunn, and Jury, Bankruptcy Judges, Presiding.
The panel affirmed the Bankruptcy Appellate Panel's reversal of the bankruptcy court's award of compensation to a chapter 7 trustee.
The trustee's compensation is calculated based on the value of the bankruptcy estate assets he disburses. In this case, secured creditors made a winning credit bid on real property of the bankruptcy estate, using money the estate owed them, rather than cash. The panel held that 11 U.S.C. § 326(a) does not permit a trustee to collect fees on a credit bid transaction in which the trustee disburses only property, not " moneys," to the creditor.
Bradley R. Tamm (argued); Lissa D. Shults and Melissa A. Miyashiro, Shults & Tamm, ALC, Honolulu, Hawaii, for Appellant.
Noah M. Schottenstein (argued), Trial Attorney, Ramona Elliot, Deputy Director/General Counsel, P. Matthew Sutko, Associate General Counsel, Executive Office for the United States Trustees, Washington, D.C.; Tiffany Carroll, Acting United States Trustee for Region 15, Curtis B. Ching, Assistant United States Trustee, United States Department of Justice, Office of the United States Trustee, Honolulu, Hawaii, for Appellee.
Daniel M. Benjamin, Ballard Spahr LLP, San Diego, California, for Amicus Curiae Carl A. Eklund.
Before: Alex Kozinski, Raymond C. Fisher, and Paul J. Watford, Circuit Judges. Opinion by Judge Kozinski.
KOZINSKI, Circuit Judge:
In bankruptcy, it's the trustee's job to manage the estate. Often, this means liquidating all the estate's assets and distributing the proceeds to creditors, shareholders and other interested parties. Some of the proceeds are awarded to the trustee as compensation, which is calculated based on the value of the assets he disburses. We address whether the ...