442 B.R. 365
Bankr. D.N.J.2011Background
- Steven and Brandene Jackus filed a joint Chapter 7 petition; Barry Sharer appointed Chapter 7 Trustee.
- Annuity from a 1996 settlement for Brandene was set to pay $190,000 over 18 years, funded via Liberty Mutual and assigned to Keyport; Debtor had already received some payments but not $130,000 remaining.
- Trustee sought sale of the Debtors’ future annuity payments for creditors’ benefit; initial notice of sale June 10, 2010; Debtors objected; court allowed auction and ordered sale within 30 days.
- Auction yielded highest bid of $64,837 by Edward Piecewicz; sale approved October 1, 2010 conditioned on New Jersey Structured Settlement Protection Act (SSPA) compliance.
- State court challenge followed; Camden County judge lacked subject-matter jurisdiction per the state court; bankruptcy court later determined SSPA compliance and jurisdiction.
- Court’s subsequent ruling confirms the annuity is property of the estate and sale is permitted under 28 U.S.C. §1334(e) and N.J.S.A. 2A:16-63 et seq. to the extent allowed by the SSPA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the bankruptcy court has jurisdiction to approve the annuity sale. | Trustee asserts exclusive jurisdiction as estate property. | Debtors contend state-law considerations govern (or dispute state-law process). | Yes; bankruptcy court has jurisdiction. |
| Whether the sale complies with the Structured Settlement Protection Act (N.J.S.A. 2A:16-63 et seq.). | Sale is in the estate’s best interests; independent advice obtained; no statute/order violations. | Not explicitly stated; implied challenge to best-interest standard in bankruptcy context. | Yes; sale satisfies SSPA requirements. |
Key Cases Cited
- In re Paul, 355 B.R. 64 (Bankr.N.D. Ill. 2001) (court discusses property-of-estate and state-law interplay in sale of structured settlements)
- In re Sparks, 788 F.2d 143 (3d Cir. 1986) (context for trustee’s business judgment and timing of distributions (creditor interests))
- In re Ferandos, 402 F.3d 147 (3d Cir. 2005) (state-law based definition of property interests and bankruptcy treatment)