of a bankruptcy of state of one party to a pending divorce asian may seek exercise or plights of powers under the bankruptcy to realize value for the benefit of the bankruptcy of state and all creditors of assets that may be marital property subject to later division by the state court or converse lee whether or not the subsequent award by the state court forecloses all the trustees rights specifically in this case the trustee is seeking to exercise her hypothetical her rights as i pathetically purchaser in judgment of the predator related to the debtors one half joint interest the marital residence of the of the debtor in the non debtor spouse in order to avoid in coal wage statutory rape created by illinois state law under section five zero three he of the illinois under state law under section five zero three the answer to that question first of all lies in the plain language of the statute section five zero three d both creates a vested interest in all marital property that resides in both spouses so in this case the non debtor spouse received a vested in kuwait interest in the debtors one half interest of the residence however the second sentence of that statute specifically provides that this interest although vested shall not uncomfort the property so as to restrict its transfer assignment or conveyance by the title holder in this case the debt unless such title holder is specifically in joint that language necessarily means that the absent a judge the debtor could have sold his one half interest in the house and clear of the employed interest of his now former spouse the only other reading of that only other possible rating which is argued by my opponent  is that if you if the in kuwait interest remains with the asset upon a transfer that absolutely would restrict the debtors ability to transfer the asset as it would income britain decrease its value contingency is not impossible i'm sorry on that is possible it's not impossible that there is no restriction on the transfer it just transfers with the incurred interest as a contingency of your o any anything that would reduce the value of the property itself such as a family such as a contract right or a contingent right in this case if you were to sell this asset subject to the contingency of a further state or state court order a at a minimum it would have to necessarily reduce the value that you could receive in a sale but further i would argue that that is the definition of encumbering in this case and therefore is prohibited by the statute so the illinois courts read this five or three d as extinguishing the other spouses contention in just him contingent one ha interest in merrill property no your honor i apologize it is not me to overstate the there is not been an illinois court that has specifically ruled on the second sentence that the interest shall not three interest then those proceeds from that sale should be theoretically marital property as property acquired after the during the mare and additionally the since the state court would retain the authority to award the property itself to the other spouse the state court would be essentially having the ability to war all her property and the value of that property which is a double award furthermore the state statutes and common law provide that the non debtor spouse will remedy here in the event that there is a transfer that injures that spouse  for starters section five will three d of the only act for mistake or to consider what they call dissipation which is a transfer by one spouse to the injury of the other when dividing making th transfers of marital property but the statute does not guarantee that injunction nor sentence junction automatically take place under state law therefore the implication being that absent that injunction it specifically stated the second sentence of five o three d the property is for the trade transfer free and clear furthermore illinois common law has long recognized the ability of a spouse in or out of the so under illinois law the non debtor spouse here does have remedies and does have protections that are not dependent on this five all three in kuwait interest remaining with the proper for more there is a compelling federal policy and issue involved here the congress is an act of the bankruptcy code which is it contains numerous policy decisions of regarding priorities interests it provides various protections yeah and if in this case the where the trustee obtains a right that is not dependent on the debtors ownership interest if you will in the one half joint interest in the house when it's dependent on they the rights to the hypothetical purchaser what half of that property in the words is specifically based on the hypothetical rights of a third party assuming a set there is no reason that the state statutes should allow the non debtor spouse to circumvent priorities and policies  bankruptcy code congress does provide protections for non better spouses and other parties including innocent predators by creating priorities of priority for tax system priority for right this doesn't  this case doesn't really implicate anything in the bankruptcy code it's a question under state law what the scope of timothy's the debtor's interest in the home well what the scope of that interest  will argue that i think that is correct that is the primary issue is what is the the nature of that interest and the there's really a two sentence statute that both creates and limits that interest that a section five zero three of the illinois act the first sentence creates it and states that that interest vess upon the commencement of the before section however the second sentence expressly limits it or qualifies this is not a vested interest in the sense that i have the property to provide me with a property right that is inviolate and remains with me absent some kind of judicial process this is a unique you know the second sentence specifically provide that this vested interest well created by by the first sentence is prohibited from encumbering the title holding part i e the party who's who has always have to admit my head is spinning just a little bit because of the variety of claims and arguments that the trustee has made throughout this case and now that we're here on the second appeal because as court well knows when we have a bankruptcy case the bankruptcy judges at least in the seventh circuit the appeal goes to the united states district court so of course here we have a twenty one page opinion from judge perkins who analyzed all of these issues he found that section five zero three he did not effect a transfer that the trustee could go after the trustee appealed that decision and after close to nine ten months we had a decision from the u s district court judge sara daryl she did have a little bit different spin on this unusual animal section five zero three d she found that there was a change in the nature of the ownership when the dissolution petition was filed in other words mr or mrs thorpe were joint tenants mrs thorpe files the dissolution action in october of tw five zero three the then vests the marital property in both of those persons judge darrow found that in reviewing the slight change from joint tenancy to vested interests that that may have been a transfer that's one of the only things i agree with the appellant in the appellant's brief so i'm not exactly sure what they are arguing are they arguing like judge darrell thought at some point her opinion that this judgment the judgment of divorce itself the decree was somehow a transfer or should be attackable is that the second is that the first sentence of five will three  invests the property is that what's attackable i'm not sure i know the all the money transfer and that's an issue in this case is a hypothetical one when the bankruptcy action is filed well that means  trustee takes the hypothetical transfer of the debtors property to to him or her yes your honor and purely hypothetical under the operation of the bankruptcy code but we don't actually have any transfer going on here than that hypothetical one what we have our interest and property and and whether there's a contingent interest in the other spouses yes shot and until the dissolution and division of property is completed by the divorce court so i'm not sure either the lower courts really flesh this out properly you're i'm not one hundred percent sure either although i was very impressed by the judge perkins as as we've got a lot google to find out what they were talking about but they did have a different different spin but if you look at the cases such as oxman by judge joy let's just look at the statute maybe ok let's look at the statute your honor under five to three d the first sentence grants a vested right in both parties the second sentence then says oh but that that right doesn't in cumber it so as to prohibit a a transfer now let's assume for example that one of the parties to the divorce has a million dollar property own solely by that person the divorce filed and it's determined that's marital property the other spouse is vested in their property what if that later sells for a million dollars and the divorce court determines that the non marital spouse or at least at the time that the divorce was filed isn't time two hundred thousand dollars of that you can't prohibit this vested right doesn't prohibit the the transaction or the transfer but it does as men as kimmel they all say the same thing what does the trustee later get the trustee has a contingent interest that vanishes when the divorce court determines the interest against that party and so really what the trustee wants us to do is have bankruptcy judges become divorce court churches and they don't want to do that they defer in all these cases starting with in ray white in the sixth circuit in one nine hundred eighty eight all of these cases de fer to the expertise of the divorce court and in this case mr small said well there's another remedy and there'd be a perverse result unless this happened in this case within days of the divorce mr thorpe took ninety eight thousand dollars and gave it away and dissipated and it was that half his half of the house that was granted to mrs thorpe to  even out that dissipation that's on the record the perverse result is taking away half of mrs thorpe's house to pay mr corpse creditors not even sure how much he had at the time the divorce so i think that five all three he has never been determined or held in the way that the trustee would like to expand that's decision in fact all of the cases are against the trustee the trustee has not cited one case no authority for the second sentence it's just made up out of  the trustee likes to use in her brief the terms qualified in coing the statute uses the term vested we know what the term bested means we know that mrs thorpe was at the time i also know what's assume that i'm wrong on a lot of this stuff and let's assume for purposes of this discussion that there was a transfer is the trustee a bona fide purchaser the trustee has totally abandoned and not mentioned in her her brief or her reply brief the doctrine of list pendants that she argued so vociferously for judge perkins shot that down didn't have a problem with that why because there's both constructive and increased notice i don't think the court will ever get to that point in this case but if you do and you read both judge perkins and judge barrows opinions you will see that both of them were quite convinced that the trustee was under constructive an inquiry notice at the time that the bankruptcy was filed one other thing that i don't see in some of the modern cases like men or in re west a recent opinion by judge barnes says the same thing says the same thing but in the earlier cases one of the things that the courts were concerned about was the use of bankruptcy as a weapon that's what has occurred in this case bankruptcy as a weapon of worst filed give away most of your property and six months later let the bankruptcy trustee go after the marital assets so the bankruptcy trustee can pay the debtors debts and not pay the dissipated spouse's assets to her that's what the trustee wants this is an expansion of the trustee poop was the idea that this could be as i put it in the brief recap well how many divorces are out there right now that are either pending or fido and are not four years old under the uniform fraudulent conveyance act in the strong arm powers the trustee has four years to go back how many divorces are we going to see attack by trustees if this is the result i don't think the the the the the trustees position is terrible in the situation it's just an invasion it is a perverse result in supreme court that found that the illinois marriage and dissolution of marriage act was constitutional one of the things that could humans he said was the purpose of the m d m a was to quote mitigate the damages done in divorce cases also specifically stated that five only three he did not a for effect a transfer so i think the illinois supreme court would have no problem with with this case either who is chaotic i'm sorry artificial and i wish they had it yes one other thing that hasn't been really brief very much your honour's and that is any point in time if this court does not have subject matter jurisdiction the court may dismiss the case under the ripper feldman doctrine what the trustee is really asking this court to do is allow the trustee to go in and attack either the statute or the decision decisions of the state court there should not be allowed we should cut that off right now sir if you see my light is on here if you have any specific questions i'd be glad to try to answer those i don't have any time for rebuttal but in the event that the court has no questions i respectfully retire new issue quite frankly the cases that mr hockey is listed out both in the brief and here before you that involve section five all three only discuss the vested nature of the interest and they are all exclusively in the context of defining the rights of the bankruptcy so that state based on section five forty one of the bankruptcy court this establishes what and what is not property of the state in the first instance the trustee here does not exercise any rights under section five forty one rather this the rights of their exercise presume a hypothetical transfer of just one half interest it is not based on section five forty one therefore those cases are really not relevant to this so this proceeding secondly the banker we are not asking the bankruptcy court to sit in judgment a review of divorce courts that is that first of all that that is not what we've asked second of all to the extent that what we in the trustee exercising her rights to challenge the results of an actual property distribution those that challenge is based on an independent right within the bankruptcy co this case five forty four act there are other rights such as section five forty seven five forty four b five forty eight all of those rights have been used and for years have been used to challenge property awards and in divorce contexts there is no there is nothing new or we're not asking to extend the law in any respect nor are we asking bankruptcy courts to sit in judgment first of all the my poem is argued that in this case the bankruptcy has been used as a weapon or the debtor was allowed to dissipate assets and ninety eight thousand dollars worth of assets and therefore the non debtor spouse explicitly awarded the house well that is essentially the calculus that the state court undertook here but that does not make bankruptcy a weapon that would result is what section five zero three  dep they do not generally have a seat at the table in the divorce court they are left they haven't done anything wrong yet let's effectively happened here in this case it was ninety eight thousand dollars or four hundred one k assets which are retirement funds and  zero one one more thing your honor the issue of constructive or inquiry notice is really a red herring that argument lispenard argument is not before the court we are not perceiving it as a statute authorizes