there eleven u s c five twenty two pm were not implicated based upon the transfer of title to real property from a limited liability company to a trust within one thousand two hundred fifty days prior to a police bankruptcy  state's decision on the fact that appellee maintain a sufficient interest in the property after title was transferred to limited liability can company such that the there was not an acquisition of any interest within the meaning of section five twenty two pm the bankruptcy and a further noted that the that helly would have had the ability to claim a homestead exemption in the real property is that it if you still or is it just the amount that was man standing is the question is the amount whether it was your honor i think that the issue as to whether or not that or had the ability to claim an exemption in the liability company is still at issue that's one of the bases for the trustees argument that the concerns underline the an act in a five twenty two p are implicated in this case so basically as i understand it everybody agrees that the homestead exemption is available when it's held in trust but then the question is really about that's correct your honor and the reason why the parties are in agreement regarding the trust is because it is an explicit provision under honor and the appellant has advanced to primary arguments in support of her position that the bankruptcy appellate panel erred the first is that under delaware law which is the state of incorporation of the limited liability company at issue nevada supreme court's decision in savage pearson that it's clear on its face that a an individual or a member of a limited liability company cannot claim an exemption in company property and  sorry i didn't mean to interrupt you do you agree with that or not i agree that if the court believes that the analysis on the savage be pearson is not clear that ultimately this is a question that is premised on the metal law and the reason why the payment position why seventy percent stand for that proposition is largely because that was a question that was certified to the nevada supreme court from the bankruptcy court as to whether or not attend it could claim a homestead exemption in a security deposit in analyzing the issue to nevada supreme court held that the definition of equity in the matter haunted statute contemplate s more than a general interest or a general right of possession rather contemplates ownership now with that which we had a dispute trying forgotten and what your position is here but i'm trying to clarify that based on that holding from the nevada supreme court stating that ownership interest is required in order to claim hotel exemption if we take that analysis and look at the delaware statutes considering limited liability law that specifically provide that a membership interest is personal property and i quote limited and a member has no specific interest in limited liability company property and that six delaware code eighteen that sevens are one so if we take the nevada supreme court's holding that an ownership interest is required and look at the delaware statute at issue governing limited liability companies it's clear that the time this property was owned by the limited liability company the debtor  member had no specific interest in general and probably as i understood the maps decision they were at least in part simply interpretating federal law specifically prive twenty two and as i understood them to be saying that your client didn't acquire any amount of interest in the property with these various changes of format and that he had retained or he and his wife had retained basically the same equity all throughout regardless of these different changes of form and if that's true what difference does it make whether the homestead exemption applies or doesn't apply well i think the the implication concerning the homes that exemption has to do with the concerns with section five twenty two p namely that it was an act that to prevent the conversion of nonexempt property to exam property within it i understand why it was passed i thank you for reading reading it but i guess i'm asking a slightly different question if all these changes of format because they lived in this house for a long time this is not one of those things where they went out and purchased some you know fifteen million dollar property to you know skate by they owned this for a long long time in various forms they made the payments on it it was always their home and for we don't know the reasons i presume for some tax reasons or something kept changing format but basically it was always there hall on which they were paying the payments and i understood the back to be saying listen when you changed forms you didn't acquire any amount of interest you just changed forms and so that's under the federal statute that just doesn't apply it to answer that question your honor i think the a prior decision that the bankruptcy appellate panel rendered on this issue their current decision conflicts with that and that is namely that it's appellant position that these transfers do have an impact that they're not just for that when they're yes but regardless of whether the this one is correct then we have to affirm it and if the other one is incorrect that's interesting but not in front of us that's correct your honor i think though in analyzing this that this isn't that i'm referencing is in a way quicken and in that case the issue that was before the court was whether or not a better could avoid a lien under section five twenty two f which is a different subsection of the same statute issue in this case and the facts of that case involved a creditor that attain the judgment against the debtor that judgment was in recorded against a the primary residence of the debtor the debtor then transferred his interest to his limited liability company and then that interest was in transferred back to him within the twelve hundred fifteen day period proceeding is bankruptcy case the debtor then sought to avoid that lien under section five lee and they held that the transfer from the property from the that are to the l c exterminated his prior interest and that it was in new interest when it was a quiet when it was transferred back to him but is that that that's why i'm asking whether we even have to get into the homestead exemption because as i understood it that was about the homestead exemption and i understood the vamp here at least in part to be walking around that question and just saying that in under the facts of this case where the people have just lived in the house forever and just kind of kept shifting formats that they didn't by doing so acquire any amount of new interest or equity or of any sort and i guess what i don't understand is why that's wrong well your honor it and i think that the crucial point that the appellant was trying to get across was that this transfer was important because had the property remained in the name the limited liability company at the time of the pelleas bankruptcy case there is a thorn in the batter under b in and land that held that the trustee could stand into the shoes of the member and liquidate that property and so  trustees as he wants argument in this case this transfer the effect of it was the conversion of nonexempt property to exempt property and wasn't prejudiced creditors by virtue of the transfers had it not occurred limit on the amount of interest acquired one thousand two hundred fifteen days before filing for bankruptcy correct that's correct so what in your view was the his entire interest from the property was transferred back so that there's not a concern over analyzing the fair market value of the property at the time that the transfer was made to him rather he did not hold an interest in the on same the homestead is a property interest doesn't bring in for most otherwise i agree with the court in the sense that the homestead exemption invalid is not enough itself of property interest but i think the facts of green are distinguished in the sense that the debtor at issue in that case it owned the vacant property for an extended period of time well outside the twelve hundred fifteen day period part is bankruptcy case was owned in his own name within the twenty fifteen days he simply moved onto the property in accord homes exemption and in that case the court stated that the more plausible interpretation of the acquisition of an interest within the meaning of section five twenty two to be contemplated contemplated ownership the acquisition of ownership in real property and to transfer it as you hear is different because prior are you folks on the legal title that which senator dell about but that's correct john i think that in this says amount there has to be an amount that is required and they've lived there for twenty years or something like twenty three years at this point i think so what what's new in terms of value well your honor it's from the trust from appellant perspective it's she does not dispute that the pelly in this case has in some form or fashion that he initially acquired the property well before his bankruptcy case however the transfer at issue when that property was transferred to his limited liability company arguably i believe he mentioned in his declaration for probate in a seaplane purposes he did position that he individually did not howled any interest in the property because his membership interest only constituted personal property and they only entitled him to a share of the profits as and no specific well if he was acting as the managing member of the limited liability company and was acting and i capacity then he and you could make that transfer this whole purpose here i mean five twenty to someone to put all this extra money in that time period into the house and to avoid them being able to use that mean bankruptcy using that as a way to prevent people from getting to it that didn't really happen here did it know there's the appellant is not arguing that there was a for the reasons i think graybar has been asked about i mean they've had this property the making their mortgage payments it's undisputed i don't think you will challenge that  so i'm trying to figure out how this comes in under that and why you're pursuing it in that way because it's not really going counter to the purpose of five twenty c a lot and had it remain that way on a police bankruptcy filing the trustee could have liquidated that property for the benefit of credit at that time it was not exactly in the eyes of about and so when the property was in transferred delaware law sense their interest was was specifically personal property the transfer back to them as trusts these implicated that provision and they then required their interest in court in toto i appreciate your honor's point about five twenty two p and what it means i would direct you back to the statutory text and in nevada we have opted out of the federal exemptions in the statute under five twenty two p reads as a result of electing in this case the debtor did elect to not use the federal exemptions but of course use that of that estate exemptions to exempt property under state or local law a debtor may not exempt any amount of the interest that was acquired well interest in what interest in the property which is i believe what the trustee is saying or interest in the exemption itself and i would say to you that interest in what may be in part an answer to your interest question it's an interest as the bat found in the exemption ultimately the trustee is arguing that the debtor acquired an interest in the debtor acquired an interest within the twelve hundred fifteen days under five twenty two p the back of course said we must look to nevada state law to determine the applicability of the exemption again getting back to the point of interest in what under five point two p let me ask you if you say the baptists correcting it to look at nevada law do we need to certify this that a court your honor i do believe you can under the green case which is of course previous one circuit authority although different facts i don't believe a sort of cation is needed i do believe that you could decide it strictly on the five twenty two peak rounds that nothing new was actually acquired no interest is actually acquired within the twelve or fifteen day i think the baptists went to more secure this way delving into the interview sees of and frankly undefined nature perhaps of that exemption law but only get to the same place that this honorable court did in green which basically of course it was a different situation in that case the property was clearly own outside the twelve hundred fifteen day period when it was the mere act of recording the homestead declaration which in nevada is a way to perfect the entitlement to the homestead but the saying that if it intended to permit an l l c member from claiming a homestead in real popularly held in an l l c it would have done the same thing that it did with the trust in trustees and they didn't do that here well there as the bat found it is certainly true there isn't a specific statute with respect to elysees or corporations or l l p s or any of the so what are we to make of that i mean they know how to do this and they chose not to they know how to do it in the specific context of a trust but there are many other numbers of artificial entity yes and i think i think you just have to return to the baps decision is the best answer to your honest question which is that you cannot draw from the action with respect to one type of an itty any conclusion that they did not mean to preclude that from other types of entities and by way of example as the bappa observed an arrest twenty one zero nine zero which is the general exemption statute does not in any way limit the entitlement to claim a homestead exemption if you title ownership nor does an arrest chapter or an arrest chapter one fifteen which also complements the exemption statute and also is the entitlement to or the ability to record the homes the declaration so in the absence of any specification and those very specific on point statutes where you would expect to find a limitation on the create type of property interest that a debtor may hold in which you could claim an exemption it does not exist in the absence of that as well as the limited guidance unfortunately that a supreme court has provided in the seventy appears in case which was of course a month the month tenancy it was probably the most tenuous interest we find ourselves in this appeal today somewhere between the savage v pearson issue of mere leasehold which was not sufficient and absolute fee total ownership fee total ownership is not expressly required in either an arrest twenty one zero nine zero or in an arrest chapter one fifteen and in the absence of that as well as the language in an arrest one fifteen that discusses the concept of a householder which the nevada supreme court has found does not require fetal ownership but indeed only involves possession an occupancy that that is at a minimum what the debt or the debtor in this case meets and so for the actual the statutes on  point twenty one in chapter twenty one zero nine zero interest one fifteen the use of the term house alter the lack of any other indication limiting specifically the claim of homestead and also just the general policy  acted statute specifically with respect to trust property that you could not infer that it meant to specifically exclude property to the extent was held in l l c a corporation or any other type of artificial entity especially where on specific facts of this case perhaps prior counsel could better answer than i but ultimately that with respect to the final transfer that is really the the grab a man on the case a transfer him to invent at least i can't speak for other jurisdictions into a trust is merely to avoid probate probate can be a expensive and time consuming proposition in many jurisdictions and the transfer into basically a self settled trust is merely a way to avoid that what about the  form if you know what it is that designed to accomplish you know i don't know the answer as to why they would hold it in an l l c perhaps at one point i'm only speculating but i would gather that to hold it in an l l c perhaps they intended on being an investment property that they would lease out to someone else that of course did not happen here for it to be clear the debtors remained excuse me the debtor remained consistently throughout for a twenty plus year period as residing in this property but that would be a typical reason i would expect to see a property being transferred into an l l c is to actually conduct business and also limit the liability of the individuals involved to the extent the property would be leased out to a third person that obviously didn't happen i suspect there are reasons given what the economy was doing at the time of the transfers that may have made that impossible the property may have been upside down i just don't know to be perfectly bl spin out a possible number of reasons why that may have happened you know when when looking back at the statute you were saying interest in what if the answer is interest in the real property  interest in the amount of you know value of the real property is the answer different your honor i think you i think ultimately under green no i think that the answer is ultimately you have to look at the actual impact on the bankruptcy estate was the estate deprived of something by virtue of the transfer and in green the answer was i think an easier case because the debtor always consistently personally owned the property and it was the mere act of filing the declaration of homestead it didn't change there was no title that if nothing moved their trailer on to that or something like that there there were other issues but that was not central to the session the other part of green i think you could reasonably infer from that is what i believe your honor had previously stated which was look there wasn't any real harm here there wasn't any change of of a difference here if they always lived on the property they always presumably could be entitled to the homestead there was no harm there was no impact on the estate regardless of how the property was held it was always exclusively within the control they always lived there for so you're saying that the that this transfer one thing that sorry that the trustees position was well when it was held in the name of the l l c it was not example first of all that is incorrect and i believe this infamous actually involves the transfer from the l l c to the trust was a transfer as exempt property to exempt property exempt to exempt means no harm in the estate it's only in the trustee must convince you that it was a transfer from nonexempt to exempt within the twelve hundred fifteen day period and that's where the same characteristics for our purposes before and after the transfer into the us where do you get that well obviously we have to start with five twenty two  for example in the green case you did not have to really reach the state law issue there because it was ultimately a determination of well there was no transfer right and what i would say here is there was no transfer within the meaning of five twenty two think my original remark to your honor was at the to the panel was that the baptists really perhaps did not need to go through the homestead analysis to come to its ultimate conclusion but it did so it's  interestingly enough your honour's this isn't really at issue on appeal but there's other case law of course interpret what five point two p means and you only have the green case in this circuit but you have to think about what it means to acquire an interest for example what if there's the mere passive appreciation of value of a piece of property property zoned outside of the twelve hundred fifteen day period but the property increases in value just because you're in  a appreciating real estate market is that an acquisition of an interest by the debtor well most cases have said no that's not a positive affirmative action by the debtor that's merely passively an incident of ownership this may be way result to say that interpret five point two p c that that is an interest the minimal amount of principle that you paid for the three point three years before you file bankruptcy is an acquisition of an interest so what's the one for you the classic example of interest for purposes of five twenty it's peak exact reason the statute was revised or revised in two thousand and five and that is to close the so called mansion loophole there are certain states that literally have unlimited homestead for florida texas alaska you know so the prototypical example perhaps as to why the statute was an act it was you know doctor in new jersey sees the writing on the wall judgments coming or perhaps a judgement is already entered moves to of property within the three point three years the twelve and fifteen days that the statute was meant to address that is not what we have here and it's an aboriginal loophole to try and close by congress but if you accept an acquisition of property as meaning normal pay down a passive appreciation of property i mean what if the debtor made double payments is that an acquisition of an interest or is that just a debtor being careful to try to cumulate additional value and perhaps not for seeing that they may have to file for bankruptcy in the future you could actually get into a very slippery slope that i've seen some other cases get into of what does it mean to acquire an interest with meaning a five twenty two p c and i think in part perhaps baps decision i do believe the bat perhaps in a sense went the extra mile in reaching the nevada state law homestead up ability issue but ultimately the conclusion is the same and that is one of no harm no foul the state were not deprived of anything regardless of how the debtors engaged in their may have engaged in their planning for a state to state planning purposes the estate ultimately wasn't the bank of state was not harmed and that is exactly what we're trying to do here is figure out whether the debtors engaging in some kind of bad act whereby a five twenty two piece should be triggered and that is literally acquiring an interest and merely passing it from one form to another but at all times exclusively with the possession control and residence of these debtors thank you in the second circuit like the ninth longest sentences i've ever heard decision savagely pearson particularly this quote by the nevada supreme court that states we decline to follow the majority of jurisdictions because the homestead statutes in many of those jurisdictions either specifically example isas or provide a much broader description of the type of interesting also he was making a different point which is that the homestead exemption is not relevant that is that it's a completely independent question and that under five twenty two p the only thing to ask is whether there was acquisition of an interest in the way that congress intended that to be which is independent of the question of how nevada law would treat understood your honor and i think that that goes back to that was it is that the acquisition of a title in the property that triggers that and it's the parents position that in this case the state was deprived of something the concerns in their section five twenty two are implicated and for those