667 B.R. 487
Bankr. N.D. Ga.2025Background
- The debtor, Randall E. Kimball, owns 100% of Stewart Street Academy & Childcare, LLC (the "LLC"), which holds title to real property in Carrollton, GA (the "Property").
- The LLC was administratively dissolved in 2022 but continued to operate and enter into significant transactions, including a lease with TCABA Carrollton, LLC (the "Movant") in 2024.
- The debtor filed for bankruptcy under Chapter 13 (later converted to Chapter 7) on August 5, 2024, listing both the LLC and the Property as interests in his schedules.
- On August 6, 2024, the Property was sold at a nonjudicial foreclosure by the lender, despite the bankruptcy filing.
- TCABA Carrollton, LLC moved for a "comfort order" to declare that the Property was not part of the bankruptcy estate and thus the foreclosure was not stayed.
- The Chapter 7 trustee ultimately did not oppose Movant’s position, and the matter was decided on the parties’ briefs and arguments.
Issues
| Issue | Kimball’s Argument | TCABA Carrollton, LLC’s Argument | Held |
|---|---|---|---|
| Does a sole owner of an administratively dissolved Georgia LLC have an interest in real property titled in the LLC sufficient to include it in the bankruptcy estate? | The LLC’s dissolution means the Property is now part of his estate, making the foreclosure void under the automatic stay. | Property remains owned by the LLC, not by Kimball; administrative dissolution does not transfer property from LLC to member. | No; the Property is not part of the debtor’s estate, so the foreclosure was not stayed. |
Key Cases Cited
- United States v. Whiting Pools, Inc., 462 U.S. 198 (defining the broad scope of property of the estate under federal law)
- Butner v. United States, 440 U.S. 48 (state law governs the nature and extent of property interests in bankruptcy)
- In re Albany Partners, Ltd., 749 F.2d 670 (actions violating the automatic stay are void in the Eleventh Circuit)
- Williams v. PRK Funding Servs., Inc., 596 B.R. 375 (property owned by an LLC is not property of the bankruptcy estate of the owner)
