473 B.R. 905
8th Cir. BAP2012Background
- Foellmi filed a Chapter 7 petition on Feb. 16, 2011.
- On Schedule B she listed “CSI Kwik Trip Profit Sharing” valued at $58,217 and initially claimed full exemption under 11 U.S.C. § 522(d)(10)(E).
- Trustee objected and the bankruptcy court sustained the objection on May 20, 2011.
- Debtor amended Schedule C first to § 522(d)(5) and then to Minn. Stat. § 550.37, Subd. 24, valuing the asset at $69,109.97 and claiming the full amount exempt.
- The asset is 20 units in the CSI Limited Partnership, tied to Kwik Trip’s employee Benefit Plan established in 1991, with eligibility requiring five years’ service (two years for management).
- Redemption rights were restricted; the General Partner could refuse redemptions, later limited to former employees, and bankruptcy trustees obtain title to units held by the debtor’s estate for settlement/recovery purposes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Minn. Stat. § 550.37, Subd. 24 may exempt the CSI units. | Foellmi contends the CSI units are exempt as a similar plan. | Trustee argues the plan is not a retirement/disability plan and units aren’t exempt. | Yes; the plan is similar and the units may be exempt. |
| Whether the plan qualifies as a “similar plan” under § 550.37, Subd. 24. | Foellmi asserts the plan provides wage-substituting income like stock bonus/profit-sharing plans. | Trustee emphasizes lack of explicit retirement/disability purpose and non-traditional plan structure. | Yes; it is similar because it substitutes wages for service. |
| Whether the debtor’s right to payments is on account of length of service. | Foellmi’s right to limited partnership units is based on length of service. | Trustee questions link to illness, disability, death, age, or length of service. | Yes; right is on account of length of service. |
| Whether distributions and redemption rights affect exemption. | Foellmi’s exemption focuses on the units themselves, not distribution mechanics. | Trustee argues distributions/redemptions relate to partnership profitability and aren’t payments on the listed grounds. | Remains exempt for the units; focus is on the plan and length of service. |
| Whether the exempt amount exceeds the statutory limit and, if so, whether the excess is reasonably necessary for support. | Foellmi asserts excess over $66,000 is reasonably necessary for support. | Trustee would limit exemption to $66,000 unless shown necessary. | Remand to determine whether any excess over $66,000 is reasonably necessary for support. |
Key Cases Cited
- In re Huebner, 986 F.2d 1222 (8th Cir.1993) (context for exemption principles (estate/confirmation))
- In re Peterson, 897 F.2d 935 (8th Cir.1990) (entitlement to exemption is de novo review)
- Bryan v. Stanton (In re Bryan), 466 B.R. 460 (8th Cir. BAP 2012) (cites exemption framework and bankruptcy appellate practice)
- In re Gagne, 166 B.R. 362 (Bankr.D.Minn.1993) (exemption analysis in Minnesota bankruptcy)
- Gagne v. Bergquist, 179 B.R. 884 (D.Minn.1994) (affirmed exemption considerations)
- Rousey v. Jacoway, 544 U.S. 320 (2005) (statutory exemptions and interpretation)