Facts: A trustee is appointed to manage an estate in bankruptcy and auctions a property held by the estate. A creditor with a lien on the property acquires the property through a credit bid. The trustee then petitions for compensation in an amount that includes the value of the credit bid, but a Bankruptcy Appellate Panel (BAP) only grants them compensation based on the amount of money the trustee disbursed and not the value of the credit bid.
Claim: The trustee seeks compensation that includes the value of the credit bid for the property, claiming they are legally entitled to calculate their compensation based on the total value including the credit bid since the statute permitting a trustee’s compensation for “moneys” disbursed is ambiguous and may be interpreted to apply to the disbursement of all assets, including real property turned over to the creditor.
Counter claim: The BAP claims the trustee is not entitled to compensation based on the value of the credit bid for the property since the statute entitles trustees to earn compensation based specifically on “moneys” disbursed, which does not include real property by definition.
Holding: A California court of appeals holds the trustee is not entitled to compensation based on the value of the credit bid for the property since the statute controlling trustee compensation only allows for compensation based on actual moneys disbursed and does not encompass real property turned over by the trustee through a credit bid. [In re: Hokulani Square, Inc. v. United States Trustee (January 26, 2015)_CA4th_]