(6th Cir. Oct. 25, 2016)

The Sixth Circuit reverses the bankruptcy court’s order permitting the Chapter 7 trustee to be paid her administrative fee from proceeds of the sale of the debtors’ Michigan real property. The debtors claimed the Michigan exemption for real property they owned. The trustee sold the property, paid creditors, and then obtained an order from the court permitting her administrative fee to be paid from the remaining proceeds. The bankruptcy court reasoned that the debtors used the full benefit of the exemption by the trustee accepting a lower purchase price from the debtors’ preferred purchaser. The Michigan statute provides that the exemption covers sale proceeds, and the bankruptcy court incorrectly applied the statute. Opinion below.

Judge: Cook

Attorney for Debtors: Melonee L. Monson-Holley

Attorney for Trustee: Beadle Smith, Thomas L. Beadle

2016-10-25-in-re-holley