466 B.R. 621
Bankr. S.D.N.Y.2012Background
- Debtor filed for Chapter 7; rent-stabilized lease at 199 East 7th St. listed as executory contract.
- Trustee offered to purchase the Lease from the landlord; no-asset status was withdrawn.
- Court extended Trustee's time to assume or reject the Lease to March 30, 2012.
- Debtor amended schedules to treat the Lease as personal property and claimed a DCL 282(2) public assistance exemption for its value.
- Trustee moved to strike the exemption; Debtor opposed.
- Court held the Lease is not exempt as a public assistance benefit and remains estate property.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the value of the rent-stabilized lease exempt under DCL 282(2)? | Debtor argues Lease value falls within 282(2) as a local public assistance benefit. | Trustee contends Lease is not a public assistance benefit and not exempt. | No; Lease value not exempt; maintained as estate property. |
Key Cases Cited
- Toledano v. Kittay, 299 B.R. 284 (Bankr. S.D.N.Y. 2003) (trustee may acquire or assign lease interests in residential leases)
- In re Stein, 281 B.R. 845 (Bankr. S.D.N.Y. 2002) (trustee authorized to sell occupancy rights in a lease)
- In re Lowe, 252 B.R. 614 (Bankr. W.D.N.Y. 2000) (DCL 282(2) interpreted as payments for debtor's support; not rent-stabilization)
- Keil v. Keil, 88 F.2d 7 (2d Cir. 1937) (exemption statutes liberally construed but bounded by context)