IN THE UNITED STATES BANKRUPTCY COURT

FOR THE NORTHERN DISTRICT OF TEXAS

FORT WORTH DIVISION 

IN RE: §

§

CHRISTOPHER GUY LYSTER,

DEBTOR

§

§ 

§

CASE NO. 24-40460-MXM-7

CHAPTER 7

MEMORANDUM OPINION

AND ORDER SUSTAINING, IN PART, AND OVERRULING, IN PART, 

LW HOLDCO V LLC’S OBJECTION TO EXEMPTIONS

[Relates to ECF No. 30] 

Before the Court is the Objection to Exemptions1 filed by LW Holdco V LLC (“Creditor”)

to certain of the exemptions claimed by Christopher Guy Lyster (“Debtor”). Specifically, Creditor

objects to (i) Debtor’s claimed homestead exemption contending that part of Debtor’s homestead 

1 Amended LW Holdco V LLC’s Objection to Claimed Exemption of Debtor, Christopher Guy Lyster, in Homestead 

and Claimed Personal Property Exemptions, ECF No. 30 (the “Objection to Exemptions”). 

The following constitutes the ruling of the court and has the force and effect therein described.

_____________________________________________________________________

Signed December 12, 2024

____________________________

United States Bankruptcy Judge

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exemption is subject to the $189,050 cap under 11 U.S.C. § 522(p)(1) (the “Homestead 

Objection”);2 and (ii) Debtor’s claimed personal property exemptions contending that such 

exemptions are not “listed separately with sufficient detail to put the trustee and interested parties 

on notice of questionable claims”3 (the “Personal Property Objection”).

The Court has reviewed and considered the Objection to Exemptions, Debtor’s Response,4

Debtor’s Brief,

5 Creditor’s Reply,6 testimony of Debtor, exhibits admitted into evidence, and the 

arguments of counsel. For reasons detailed below, the Court SUSTAINS, in part, Creditor’s 

Homestead Objection7 and OVERRULES Creditor’s Personal Property Objection.

I. JURISDICTION

The Court has subject matter jurisdiction over this contested matter pursuant to 28 U.S.C. 

§§ 157 and 1334 and the standing order of reference in this district. This is a core proceeding under 

28 U.S.C. §§ 157(b)(2)(A), (B), and (O). The Court has statutory and constitutional authority to 

enter a final order in this contested matter. Venue is proper before this Court pursuant to 28 U.S.C. 

§§ 1408 and 1409.

This Order constitutes the Court’s findings of fact and conclusions of law under Fed. R. 

Civ. P. 52, which is incorporated by Fed. R. Bankr P. 7052 and 9014.8

2 Objection to Exemptions, pgs. 11–18, ¶¶ 29–40. 3 Objection to Exemptions, pgs. 18–19, ¶¶ 41–42 (quoting in re Doyle, 209 B.R. 897, 901 (Bankr. N.D. Ill. 1997)

(internal citations and quotations omitted)). 4 Response to Amended LW Holdco V LLC’s Objection to Claimed Exemptions of Debtor, Christopher Guy Lyster, in 

Homestead and Claimed Personal Property Exemptions, ECF No. 36 (the “Debtor’s Response”). 5 Christoper Guy Lyster’s Brief in Support of Response to LW Holdco V LLC’s Amended Objection to Claimed 

Exemptions of Debtor, Christopher Guy Lyster, in Homestead and Claimed Personal Property Exemptions, ECF No. 

40 (the “Debtor’s Brief”). 6 Reply Brief to Christopher Guy Lyster’s Brief in Support of Response to LW Holdco V LLC’s Amended Objection to 

Claimed Exemptions of Debtor, Christopher Guy Lyster, in Homestead and Claimed Personal Property Exemptions,

ECF No. 41 (the “Creditor’s Reply”). 7 At the commencement of the hearing on the Homestead Objection, Debtor and Creditor agreed to bifurcate the 

hearing and abate a determination of the value of the Meadow Hill Property and its impact, if any, on the Homestead 

Objection until after the Court issued this ruling.

8 Any findings of fact that should more appropriately be characterized as a conclusion of law should be regarded as 

such, and vice versa.

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II. FINDINGS OF FACT

A. Debtor’s Meadow Hill Property

On April 14, 2010, Debtor, who was single at the time, and Ms. Monika Cooper (“Ms. 

Cooper”), also single at the time, purchased two adjoining individual tracts of land totaling 7.393 

acres in Parker County, Texas.9 The two adjoining tracts were then replatted into a single real estate 

tract.

On June 12, 2010, Debtor and Ms. Cooper were married.10 Thereafter, in 2011, Debtor and 

Ms. Cooper began construction of their home on the 7.393-acre tract of land (the “Meadow Hill 

Property”).11 After completing the construction of the home in 2012, Debtor and Ms. Cooper

moved into and lived in the Meadow Hill Property as their homestead. 

B. Creditor’s Claim Against Debtor

In 2018, Debtor was a member of the law firm Puls Haney Lyster P.L.L.C. (the “Puls Law 

Firm”). On August 6, 2018, Creditor and the Puls Law Firm entered into a Pre-Paid Forward 

Purchase and Sale Agreement (the “Investment Agreement”),

12 in which Creditor agreed to 

provide litigation funding to the Puls Law Firm. Additionally, the three partners of the Puls Law 

Firm at that time, which included the Debtor (together, the “Guarantors”), entered into a Guaranty 

and Agreement,

13 in which the Guarantors, in their personal capacities, guaranteed the Puls Law 

Firm’s obligations under the Investment Agreement.

Creditor contends that it provided more than $3.2 million in litigation funding to the Puls 

Law Firm between August 2018 and December 2019.

14 Thereafter, disputes arose between 

9 Creditor Exs. 1 and 2.

10 Creditor Ex. 14 at pg. 2. 11 Objection to Exemptions at pg. 4, ¶ 5; see also Testimony of Debtor [1:55:00]. 12 Creditor Ex. 19 at pg. 11. 13 Creditor Ex. 19 at pg. 72. 14 Objection to Exemptions at pg. 7, ¶ 14. See also Debtor’s Brief at pg. 4, ¶ 12.

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Creditor and the Puls Law Firm and Guarantors culminating in Creditor filing a lawsuit on August 

5, 2021, in a New York State Court15 against the Puls Law Firm and Guarantors. 

Debtor filed an answer and counterclaim in the New York Case. Debtor contends, in part, 

that (i) he “vigorously” contests the Creditor’s claims against him;

16 (ii) he did not work directly 

on any of the litigation matters that were funded by Creditor;17 and (iii) he had withdrawn from 

the Puls Law Firm in August 2020.18 After Debtor withdrew from the Puls Law Firm, the firm 

eventually dissolved and ceased operations.

19 Meanwhile, Debtor and Ms. Cooper formed Cooper 

& Lyster, PLLC,20 which continues to exist. 

The New York Case is currently pending but is stayed against Debtor by the § 362 

automatic stay in Debtor’s bankruptcy case.

21

C. Debtor and Ms. Cooper Divorce

On November 10, 2022, Ms. Cooper filed a Divorce Proceeding22 against Debtor. Debtor 

testified, credibly, that he and Ms. Cooper (i) were represented by separate counsel in the Divorce 

Proceeding; (ii) exchanged appraisals and inventories of assets; and (iii) engaged in many 

negotiations concerning the division and partition of the marital estate.

On August 29, 2023, Debtor and Ms. Cooper entered into an Agreement Incident to Divorce

(the “Divorce Agreement”).

23 The Divorce Agreement details the division and partition of 

Debtor’s and Ms. Cooper’s entire marital estate. The Divorce Agreement also provides for various 

15 LW Holdco V LLC v. Kelly Puls, Mark Haney and Chris Lyster, Index No. 654747/2021, pending in the Supreme 

Court of the State of New York, County of New York (the “New York Case”). 16 Debtor’s Brief at pg. 4–5, ¶ 13. 17 Debtor’s Brief at pg. 4, ¶ 12. 18 Objection to Exemptions at pg. 7, ¶ 18; see also Debtor’s Response at pg. 3, ¶ 18. 19 Objection to Exemptions at pg. 7, ¶ 18; see also Debtor’s Response at pg. 3, ¶ 18. 20 Objection to Exemptions at pg. 7, ¶ 18; see also Debtor’s Response at pg. 3, ¶ 18. 21 Debtor’s Brief at pg. 5, ¶ 23. 22 See In the Matter of the Marriage of Monika G. Cooper and Christopher Guy Lyster, Cause No. CIV-22-0703, 

County Court at Law #2, Parker County, Texas (the “Divorce Proceeding”); see also Debtor’s Brief at pg. 5, ¶ 14. 23 Creditor Ex. 15. See Debtor’s Brief at pg. 5, ¶¶ 15–18; see generally, testimony of Debtor [1:40:00].

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indemnity and hold harmless agreements between Debtor and Ms. Cooper regarding their marital 

liabilities. 

On September 8, 2023, an Agreed Final Decree of Divorce24 was entered in the Divorce 

Proceeding, which provides in pertinent part:

The Court finds that the community property of the parties has been divided 

and partitioned pursuant to the [Divorce] Agreement and the division of 

property is a just and right division.25

. . .

IT IS ORDERED AND DECREED that the community property of the 

parties has been divided and partitioned pursuant to the [Divorce] 

Agreement and that the division of property is a just and right division.26

Pursuant to the Divorce Agreement and Agreed Final Decree of Divorce, Ms. Cooper 

divested and conveyed all her right, title, and interest in the Meadow Hill Property and certain of 

the marital personal property to Debtor. Consequently, to evidence Ms. Cooper’s divestment and 

conveyance of her right, title, and interest in the Meadow Hill Property to Debtor, she executed a 

Special Warranty Deed27 which “grants, sells, and conveys to [Debtor] all of [Ms. Cooper’s] 

interest in the [Meadow Hill Property].”28 Additionally, Debtor executed a Deed of Trust to Secure 

Assumption29 evidencing Debtor’s agreement to indemnify and hold Ms. Cooper harmless from 

any failure by Debtor to satisfy the then existing mortgage debt on the Meadow Hill Property.

30

Likewise, Debtor divested and conveyed all his right, title, and interest in certain real property 

located in Colorado and other marital personal property to Ms. Cooper. 

24 Creditor Ex. 14; see also Debtor’s Brief at pg. 5, ¶ 18. 25 Creditor Ex. 14 at pg. 2, ¶ 5. 26 Creditor Ex. 14 at pg. 2. 27 Creditor Ex. 11. 28 Creditor Ex. 11, pg. 2. The Special Warranty Deed was ultimately recorded in the real property deed records of 

Parker County on February 1, 2024. See Creditor Ex. 11 at pg. 5. See also, Creditor Ex. 15 at pg. 3, ¶ H-3. 29 Creditor Ex. 12, pg. 2. 30 Creditor Ex. 14 at pgs. 3–4, ¶ H-3. 

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Creditor contends that (i) Ms. Cooper “is an estate-planning lawyer”;

31 (ii) “[t]he divorce 

was nothing more than an attempt to prevent Debtor’s creditors from obtaining Debtor’s assets”;

32

and (iii) “Debtor gave to Ms. Cooper essentially all of his non-exempt property which totaled over 

$1.5 million in value.”33 Creditor, however, failed to offer sufficient credible evidence to proveup its allegations. 

Rather, the uncontroverted evidence presented during the hearing established that (i) the 

divorce was amicable; (ii) Debtor and Ms. Cooper continue to be co-owners of their law firm; and 

(iii) Ms. Cooper continues to stay at the Meadow Hill Property a week or two each month. These

uncontroverted facts, standing alone, fail to prove that Debtor’s and Ms. Cooper’s divorce was, in 

fact, a facade or that they intended to hinder, delay, or defraud creditors by disposing of property 

that Debtor would not have been able to exempt in a subsequent bankruptcy filing. Consequently, 

Creditor failed to satisfy its burden of proof by a preponderance of the evidence that Debtor’s 

claimed exemptions should be disallowed because Debtor and Ms. Cooper intended to hinder, 

delay, or defraud creditors through the division and partition of their marital assets in the Divorce

Proceeding.

34

Additionally, and more significantly, Creditor did not assert a § 522(o) objection to 

Debtor’s claimed exemptions. Section 522(o) provides a ten-year look-back period to determine 

whether the debtor disposed of non-exempt property “with the intent to hinder, delay, or defraud 

a creditor.”35 Section 522(o) prevents a debtor from converting non-exempt property to exempt 

31 Creditor’s Reply at pg. 2, ¶ 1. 32 Creditor’s Reply at pg. 3, ¶ 2. 33 Creditor’s Reply at pg. 2, ¶ 1. 34 “The party objecting to an exemption in bankruptcy has the burden of proving by a preponderance of the evidence 

that the exemption is improper.” In re Cipolla, 476 F. App'x 301, 305 (5th Cir. 2012); FED. R. BANKR. P. 4003(c) 

(burden of proof).

35 11 U.S.C. § 522(o). 

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property by disallowing an exemption to the extent of the value of the conversion.36 Thus, a debtor 

who intended to defraud his or her creditors by either conveying away his or her interest in nonexempt property could lose the homestead exemption by that same amount. Again, Creditor did 

not timely assert a § 522(o) objection to Debtor’s claimed exemptions, and the deadline to assert 

a § 502(o) objection has long since passed.37 

D. Debtor’s Bankruptcy Filing

On February 7, 2024 (the “Petition Date”), Debtor filed his Voluntary Petition for relief 

under Chapter 7 of the Bankruptcy Code.

38 Debtor testified that his bankruptcy filing was 

necessitated primarily due to the litigation costs to defend against Creditor’s claim against him in 

the State Court Case.39

In his initial bankruptcy schedules, Debtor elected Texas state exemptions under 11 U.S.C. 

§ 522(b)(3)40 and claimed as his exempt property (i) his entire 100% ownership interest in the 

Meadow Hill Property as his homestead;

41 and (ii) various personal property.42

Although Debtor initially asserted that as of the Petition Date the “current value” of the 

Meadow Hill Property was $1.3 million subject to a $455,564.55 mortgage lien,

43 Debtor 

subsequently filed an Amended Schedule A/B44 contending that the “current value” of the Meadow 

Hill Property was $950,000 as opposed to $1.3 million. On August 27, 2024, Creditor filed its 

36 See Int’l Beauty Prods., LLC v. Beveridge (In re Beveridge), 416 B.R. 552, 581 (Bankr. N.D. Tex. 2009); see also 

In re Anderson, 374 B.R. 848, 857–60 (Bankr. D. Kan. 2007) (reversed on other grounds). 37 FED. R. BANKR. P. 4003(b). 38 Creditor Ex. 17. 39 See also Debtor’s Brief at pgs. 5–6, ¶¶ 20–21. 40 See also Tex. Const. Art. 16 §§ 50, 51 and Tex. Prop. Code §§ 41.001–002. 41 Schedule C, Creditor Ex. 17, pg. 19. 42 Schedule C, Creditor Ex. 17, pgs. 19–22. 43 See Schedules A/B and D, Creditor Ex. 17 at pgs. 9 and 23, respectively. 44 ECF No. 46.

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Creditor’s Supplemental Objection45 disputing Debtor’s revised “current value” of the Meadow 

Hill Property. At the commencement of the hearing, however, Debtor and Creditor agreed to 

bifurcate the hearing and abate a determination of the disputed value of the Meadow Hill Property

and its impact, if any, on the Homestead Objection until after the Court issued this ruling.

On June 13, 2024, Creditor filed a Proof of Claim in Debtor’s bankruptcy case in the 

alleged amount of $5,121,303.03.46

On April 23, 2024, Creditor took a Rule 2004 examination of Debtor.47

On May 24, 2024, Creditor timely filed the Objection to Exemptions raising both the 

Homestead Objection and the Personal Property Objection.

48

III. CONCLUSIONS OF LAW

A. The Homestead Objection

Debtor claims as his exempt homestead 100% of his interest in the Meadow Hill Property.

49

Creditor objects to Debtor’s claim that he is entitled to exempt his entire 100% interest in the 

Meadow Hill Property. Rather, Creditor contends that the value of the 50% community property 

interest in the Meadow Hill Property previously owned by Ms. Cooper—but acquired by Debtor 

within 1215 days of Debtor’s Petition Date—is subject to the $189,050 cap under 11 U.S.C. § 

522(p)(1).

45 LW Holdco V LLC’s Objection to Debtor’s Amended Schedule A/B and Supplement to LW Holdco V LLC’s 

Amended Objection to Claimed Exemption of Debtor, Christopher Guy Lyster, In Homestead and Claimed Personal 

Property Exemptions, ECF No. 53 (the “Creditor’s Supplemental Objection”). 46 Creditor Ex. 19. 47 See ECF No. 23; see also Objection to Exemptions at pgs. 10–11, ¶ 28 and Debtor’s Brief at pg. 8, ¶ 32. 48 The original deadline to file objections to Debtor’s claimed exemptions was April 5, 2024. See ECF No. 4. Debtor, 

however, agreed to extend Creditor’s deadline to file objections to Debtor’s claimed exemptions to May 24, 2024. 

See ECF No. 21. 49 Schedule C, Creditor Ex. 17.

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To address the Homestead Objection, the Court must first determine if Debtor acquired 

“any amount of interest”50 in the Meadow Hill Property during the 1215-days prior to the Petition 

Date. To answer this question, the Court must first turn to Texas state law to determine Debtor’s 

and Ms. Cooper’s interests in the Meadow Hill Property prior to and after their divorce.

1. Texas Community Property Law Generally

In Texas, all marital property is characterized as either community property, separate

property, or mixed property.

51 Community property is property that is acquired or created during 

the marriage.

52 Although the Texas Family Code does not explicitly state that each spouse’s 

interest in community property is an equal and undivided one-half beneficial interest in the whole, 

Texas case law makes that proposition clear.53 Additionally, community property in Texas is 

presumed to be subject to each spouse’s joint-management rights,

54 and such community property 

cannot be sold, conveyed, or encumbered without both spouses joining in the transaction.

55

2. Partition of Community Property in a Divorce Proceeding Under Texas Law

When a Texas marriage is being dissolved in a divorce, the state court is required to divide 

and partition the community property estate between the soon to be ex-spouses.

56 Although during 

50 11 U.S.C. § 522(p)(1). 51 Eileen Gaffney & Randall B. Wilhite, O’Connor’s Texas Family Law Handbook Ch. 2, § 2 “Marital property 

defined” (2025 ed.); see also Hilley v. Hilley, 342 S.W.2d 565, 567 (Tex. 1961) (community or separate); Gleich v. 

Bongio, 99 S.W.2d 881, 883 (Tex. 1937) (mixed). 52 Gaffney & Wilhite, O’Connor’s Texas Family Law Handbook Ch. 2, § 2.2 “Community property” (2025 ed.). 53 See Tex. Fam. Code Ann. § 7.001; see also In re Wald, 2012 Bankr. LEXIS 2552, 2012 WL 2049429, at *2

(Bankr. W.D. Tex. 2012) (citing Burnham v. Hardy Oil Co., 108 Tex. 555, 564, 195 S.W. 1139 (Tex. 1917)); Free v. 

Bland, 369 U.S. 663, 664, 82 S.Ct. 1089, 8 L.Ed.2d 180 (1962). 54 Shiffers v. Est. of Ward, 762 S.W.2d 753, 756 (Tex.App.—Fort Worth 1988, writ denied). 55 Tex. Fam. Code § 5.001; Washington-Jarmon v. OneWest Bank, 513 S.W.3d 103, 110 (Tex. App.—Hous. [14th

Dist.] 2016, no pet.); Geldard v. Watson, 214 S.W.3d 202, 207 (Tex. App.—Texarkana 2007, no pet.); City of Emory 

v. Lusk, 278 S.W.3d 77, 85 (Tex.App.—Tyler 2009, no pet.); Jean v. Tyson-Jean, 118 S.W.3d 1, 5 (Tex.App.—Hous.

[14th Dist.] 2003, pet. denied). 56 See Tex. Fam. Code Ann. § 7.001 (just and right division of the community estate); 7.002 (confirmation of each 

spouses’ separate property); see also Cameron v. Cameron, 641 S.W.2d 210, 214 (Tex. 1982); Hailey v. Hailey, 331 

S.W.2d 299, 302–03 (Tex. 1960); Forgason v. Forgason, 911 S.W.2d 893, 895–96 (Tex. App.—Amarillo, 1995, writ 

denied).

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marriage each spouse owns an equal and undivided one-half beneficial interest in all community 

property, each spouse is not necessarily entitled to half the community estate when the marriage 

ends in divorce. Instead, the state court is required to make a “just and right” division of the 

community estate.

57 Ultimately, the state court must award ownership title for each community 

property asset to either spouse as his or her separate property, or jointly to both spouses as joint 

tenants or tenants-in-common.

58 The effect of the division and partition of the community property 

is to vest each spouse with the exclusive ownership and right of possession over the specific 

property being awarded to that particular spouse as his or her separate property.

59

After a divorce decree is finalized, the parties generally take an additional step to evidence 

the division and divestiture of the ex-spouse’s prior community property interest in the property. 

For real property, it is most common to evidence the division and partition through a specialwarranty deed whereby the ex-spouse divest and conveys his or her right, title, and interest in the 

real property to the ex-spouse. Then, the special warranty deed is filed in the county real property 

records where the real property is located.

60

3. Debtor Acquired Ms. Cooper’s 50% Community Property Interest in the Meadow 

Hill Property through the Divorce Proceeding

In 2012, Debtor and Ms. Cooper moved into the Meadow Hill Property as their principal 

residence and homestead. Under Texas law, prior to their divorce, the Meadow Hill Property

constituted Debtor’s and Ms. Cooper’s jointly managed community property. Consequently,

57 See Tex. Fam. Code Ann. § 7.001; Jacobs v. Jacobs, 687 S.W.2d 731, 733 (Tex. 1985). 58 See Tex. Fam. Code Ann. § 7.001; see also Gaffney & Wilhite, O’Connor’s Texas Family Law Handbook Ch. 7-A, 

§ 7 “Dividing community assets & liabilities” (2025 ed.). 59 Hailey v. Hailey, 331 S.W.2d 299, 303 (Tex. 1960); Garza v. Cavazos, 221 S.W.2d 549, 552 (Tex. 1949); 

Forgason v. Forgason, 911 S.W.2d 893, 896 & n.3 (Tex. App.—Amarillo, 1995, writ denied). 60 Gaffney & Wilhite, O’Connor’s Texas Family Law Handbook Ch. 7-B, § 10.2(1) (2025 ed.). See also Rothschild, 

Real Estate Transfers—What Do those Documents Mean?, Marriage Dissolution Institute, State Bar of Texas CLE, 

ch. 18, pg. 3 (2018).

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Debtor and Ms. Cooper each held an undivided 50% equity ownership interest in the Meadow Hill 

Property. 

Through the Divorce Agreement and Agreed Final Decree of Divorce, Ms. Cooper was 

divested of her 50% undivided ownership interest in the Meadow Hill Property. Consequently, as 

is customary in Texas, Ms. Cooper executed the Special Warranty Deed conveying her right, title, 

and 50% equity interest in the Meadow Hill Property to Debtor.

61 Following the conveyance, 

Debtor then held 100% ownership interest in the Meadow Hill Property with the absolute right and 

ability to sell, convey, or encumber the Meadow Hill Property. Therefore, based on controlling 

Texas law, the Court finds and concludes that Debtor acquired Ms. Cooper’s 50% undivided 

ownership interest in the Meadow Hill Property within 1215 days of the Petition Date.

4. Application of § 522(p)(1) to the Homestead Objection

Section 522(p)(1) reads, in relevant part:

[A]s a result of electing under subsection (b)(3)(A) to exempt property . . ., 

a debtor may not exempt any amount of interest that was acquired by the 

debtor during the 1215-day period preceding the date of the filing of the 

petition that exceeds in the aggregate $189,05062 in value in—

. . . 

(D) real or personal property that the debtor . . . claims as a 

homestead.63

The key inquiry before the Court is whether Debtor’s acquisition of Ms. Cooper’s 50% 

undivided ownership interest in the Meadow Hill Property within 1215 days of the Petition Date 

constitutes an “interest that was acquired by the debtor” within the meaning of § 522(p)(1). When 

determining whether a debtor has acquired an “interest” in property that is subject to § 522(p)(1), 

courts have applied two different theories.

61 Creditor Ex. 11. 62 The original cap in § 522(p) was $125,000, but the cap is adjusted at each 3-year interval ending on April 1 under 

11 U.S.C. § 104.

63 11 U.S.C. § 522(p)(1) (emphasis added).

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a. Title Theory vs. Equity Theory 

Debtor contends that the word “interest” refers to an unquantifiable title or fee interest in 

the property (the “Title Theory”). Thus, Debtor contends that since he initially acquired title to the 

Meadow Hill Property more than a decade prior to his bankruptcy filing, the “interest” he acquired 

was outside the required 1215-day timeline required by § 522(p)(1). Consequently, Debtor 

contends the Homestead Objection must be overruled.

Creditor, on the other hand, contends that the term “interest” refers to a legal or equitable 

interest in the property that can be acquired and quantified by a monetary figure (the “Equity 

Theory”). Thus, Creditor contends that because Debtor “acquired” Ms. Cooper’s 50% equity

interest in the Meadow Hill Property through the Divorce Proceeding—well within 1215-days of 

the Petition Date—Debtor’s newly acquired 50% equity interest in the Meadow Hill Property is 

subject to the homestead exemption cap in § 522(p)(1). Consequently, Creditor contends the 

Homestead Objection must be sustained.

Courts across the country are split on (i) whether § 522(p)(1) is clear on its face or 

ambiguous requiring consideration of external sources to determine the application and intent of § 

522(p)(1);64 and (ii) which theory—the Title Theory or the Equity Theory—applies in a § 

64 Some courts have found § 522(p)(1) to be clear and unambiguous on its face. See e.g., Wallace v. Rogers (In re 

Rogers), 513 F.3d 212, 226 (5th Cir. 2008) (hereinafter, “Rogers II”); Wallace v. Rogers (In re Rogers), 354 B.R. 

792, 796 (N.D. Tex. 2006) (hereinafter, “Rogers I”); In re Presto, 376 B.R. 554, 576 (Bankr. S.D. Tex. 2007).

Whereas other courts have found § 522(p)(1) to be ambiguous requiring those courts to review external sources to 

determine the meaning and intent of § 522(p)(1). See e.g., In re Greene, 583 F.3d 614, 622 (9th Cir. 2009); In re 

Reinhard, 377 B.R. 315, 319–20 (Bankr. N.D. Fla. 2007); In re Rasmussen, 349 B.R. 747, 758 n. 6 (Bankr. M.D. 

Fla. 2006); In re Blair, 334 B.R. 374, 376 (Bankr. N.D. Tex. 2005). 

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522(p)(1) analysis.

65 These issues were addressed by the Fifth Circuit Court of Appeals in Rogers 

II.

66

In Rogers II, the debtor had acquired title to real property outside the 1215-day statutory 

period in § 522(p)(1), but within the 1215-day period, the debtor designated the real property as 

her homestead. Although the Fifth Circuit ultimately concluded that a homestead designation, 

itself, did not constitute an “interest” that was acquired by the debtor,

67 the Fifth Circuit addressed

the disputes and conflicting case law analyzing § 522(p)(1).68

First, the Fifth Circuit agreed with the district court’s conclusion in Rogers I69 that § 

522(p)(1) is clear on its face and not ambiguous.

70 But, the Fifth Circuit noted that, “[e]ven 

assuming that § 522(p)(1) is ambiguous, the legislative history makes clear that the term ‘interest’

refers to some vested economic interest in property acquired during the statutory period, not a 

homestead interest.”71

Second, the Fifth Circuit recognized that the lower courts in Rogers disagreed on the proper 

theory to apply to the term “interest” in § 522(p)(1)—the bankruptcy court adopted the Title 

Theory, whereas the district court adopted the Equity Theory.72 In adopting the Title Theory, the 

bankruptcy court concluded that, because the debtor had acquired title to the property outside the 

65 Some courts applied the Title Theory to the term “interest” in § 522(p). See e.g., In re Greene, 583 F.3d at 624–25; 

In re Aroesty, 385 B.R. 1, 7 (1st Cir. BAP 2008); In re Blair, 334 B.R. 374, 376–77 (Bankr. N.D. Tex. 2005).

Whereas, other courts applied the Equity Theory to the term “interest” in § 522(p)(1). See e.g., Rogers I, 354 B.R. 

792, 796 (N.D. Tex. 2006)); Soulé v. Willcut (In re Willcut), 472 B.R. 88, 96 (1st Cir. BAP 2012); In re Presto, 376 

B.R. at 576. 66 Rogers II, 513 F.3d 212 (5th Cir. 2008). 67 Rogers II, 513 F.3d at 227. 68 Rogers II, 513 F.3d at 217–22. 69 Rogers I, 354 B.R. 792, 796 (N.D. Tex. 2006) (“[a]s a threshold matter, the court finds the language of § 522(p) to 

be unambiguous”).

70 Rogers II, 513 F.3d at 226 (“[t]he statute is not ambiguous as to whether a homestead interest is covered by § 

522(p)(1)”).

71 Rogers II, 513 F.3d at 226. 72 Rogers II, 513 F.3d at 217–18; see also Rogers I, 354 B.R. at 796.

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1215-day period in § 522(p)(1), the § 522(p)(1) cap did not apply. On appeal, the district court 

disagreed with the bankruptcy court’s adoption of the Title Theory and instead applied the Equity 

Theory concluding that the term “interest” in § 522(p)(1) means “some legal or equitable interest 

that can be quantified by a monetary figure.”73 In addition to analyzing both lower courts’

reasoning, the Fifth Circuit also analyzed other courts’ opinions addressing the Title Theory versus 

Equity Theory dispute.74 

In its analysis, the Fifth Circuit noted concerns and flaws with both theories. For example, 

the Fifth Circuit observed:

Those courts adopting the equity definition have been forced to address 

complex issues regarding passive and active equity appreciation during the 

1,215-day period. . . . In contrast, those courts adopting the title definition 

have crafted an easily-applied rule that is arguably in conflict with the 

statutory language indicating that the term “interest” refers to a quantitative 

or monetary value.75

Ultimately, however, the Fifth Circuit chose not to adopt either theory, concluding “it [is] 

unnecessary at this time to pick a side in the title versus equity debate.”76 Although the Fifth Circuit 

did not officially “pick a side in the title versus equity debate[,]” the statements and observations 

made by the Fifth Circuit in Rogers II seem to favor the Equity Theory as the more persuasive 

theory. For example, the Fifth Circuit noted that the Title Theory “is arguably in conflict with the 

statutory language indicating the term ‘interest’ refers to a quantitative or monetary value.”77

Further, as more evidence of an indication that the 5th Circuit finds the Equity Theory more 

persuasive, the Fifth Circuit noted:

The legislative history indicates that Congress was concerned with the 

acquisition of vested economic interests in property during the statutory 

73 Rogers II, 513 F.3d at 217 (quoting Rogers I, 354 B.R. at 796). 74 Rogers II, 513 F.3d at 218–22. 75 Rogers II, 513 F.3d at 221 (emphasis added). 76 Rogers II, 513 F.3d at 222. 77 Rogers II, 513 F.3d at 222.

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period. . . . The statutory text and legislative history indicate that the term 

“interest” refers to vested economic interests in the property that were 

acquired by the debtor within the 1,215-day period preceding the filing of 

the petition.78

Finally, the Fifth Circuit positively cited Presto noting that, “[r]ecently, a bankruptcy court 

addressed the issue of whether acquiring an ex-spouse’s community property interest in the 

homestead property is a form of active equity appreciation that is subject to § 522(p)(1).”79

b. In re Presto 

Although several published opinions and well-respected commentary have discussed and 

analyzed the Title Theory versus the Equity Theory debate, it appears that the Presto decision is 

the only published opinion that addresses the specific fact scenario before this Court—“whether a 

spouse’s community property interest in a homestead is a type of ‘interest’ that can be ‘acquired’ 

by a division of property resulting from a divorce decree.”80

In Presto, the bankruptcy court applied the Equity Theory and concluded:

[T]he interest that was acquired by [husband] from [wife] as a result of their 

divorce had a definite, ascertainable monetary value. . . . Prior to the 

divorce, [husband] shared a community property interest in the [homestead] 

with [wife]. As a result of the Divorce Decree, the [homestead] became the 

[husband’s] sole and separate property. He went from owning a half interest 

in the undivided whole to owning the entire property in fee simple. 

Therefore, the monetary value of [wife’s] community property interest is 

equal to half of the total value of the [homestead] on the date of the 

divorce.81 . . . The Divorce Decree resulted in a transaction whereby 

[husband] conveyed his rights to non-exempt property in exchange for 

greater rights in an exempt homestead. The underlying transaction was an 

increase in the monetary value in [husband’s] interest in the [homestead]. 

Therefore, the Court finds that the community property interest acquired by 

[husband] in the Divorce Decree had a monetary value, and is subject to § 

522(p).82 . . . As a result of the Divorce Decree, [wife] executed a Special 

78 Rogers II, 513 F.3d at 227. 79 Rogers II, 513 F.3d at 222 (“[i]f the Forney Property had constituted the community property of the debtor and her 

husband, the Wallace’s argument might have some merit.”). 80 In re Presto, 376 B.R. at 576. 81 In re Presto, 376 B.R. at 577. 82 In re Presto, 376 B.R. at 578.

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Warranty Deed with Assumption which granted [husband] all of her rights 

in the [homestead]. This act resulted in the legal title to the [homestead] 

changing after the divorce. Thus, . . . [wife’s] community property interest 

qualifies as an ‘interest’ under § 522(p).83. . . The Court finds that [husband] 

actively acquired [wife’s] community property interest in the [homestead] 

through the Divorce Decree. . . . [I]t is the Divorce Decree that this Court 

finds to have been an active acquisition.84

Debtor, however, contends that the Presto court’s analysis and conclusions are flawed, and 

this Court should not adopt or follow Presto. First, Debtor contends that the Fifth Circuit did not 

specifically adopt Presto in Rogers II and Presto is nonbinding on this Court.85 The Court 

acknowledges that the Fifth Circuit did not specifically adopt Presto as the controlling law in this 

circuit concerning the Title Theory versus Equity Theory debate and that Presto is not binding on 

this Court. But it is also noteworthy that the Fifth Circuit did not question or criticize Presto. Thus,

Debtor’s first contention is not persuasive and fails to establish that Presto is flawed and should 

not be followed.

Second, Debtor contends that Presto “stands in factual contrast when compared to the facts 

in this case.”86 Again, the Court acknowledges that Presto contained significant facts not relevant 

in this case. But the facts in Presto that are relevant to the narrow issue before this Court are 

directly on point—whether the debtor’s acquisition of his ex-spouse’s community property interest 

in the homestead constitutes the acquisition of “an amount of interest” by the debtor within the 

meaning of § 522(p)(1). Thus, Debtor’s second contention that Presto “stands in factual contrast” 

to this case is not persuasive.

83 In re Presto, 376 B.R. at 578. 84 In re Presto, 376 B.R. at 579. 85 Debtor’s Brief at pgs. 14, 20. 86 Debtor’s Brief at pgs. 14, 18–20.

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Third, Presto held that “any interest the Debtor acquired through the Divorce Decree is not 

protected by § 522(p)(2)(B).”87 Debtor contends that the Presto court “failed to recognize that a 

divorce proceeding via a divorce decree is a legitimate vehicle for establishing” entitlement to the 

§ 522(p)(2)(B) exception to § 522(p)(1).

88

Section 522(p)(2)(B) states:

For purposes of paragraph (i), any amount of such interest does not include 

any interest transferred from a debtor’s previous principal residence (which 

was acquired prior to the beginning of such 1215-day period) into the 

debtor’s current principal residence, if the debtor’s previous and current 

residences are located in the same State.89

Thus, Debtor contends that the Divorce Agreement and Agreed Final Decree of Divorce

transformed the Meadow Hill Property from his “previous principal residence” into his “current 

principal residence.” In support of this transformation proposition, Debtor argues:

The nature of the ownership of [his] ‘previous principal residence’ before 

the divorce was [an] undivided community property interest. After a just 

and right division in the Divorce Proceeding, [Ms.] Cooper was divested of 

her interest in the Meadow Hill Property. The divestiture changed 

[Debtor’s] interest to a fee simple ownership. [Debtor] before divorce had 

possession of 100% of Meadow Hill Property and after the divorce that 

100% possession continued. The fact that both the ‘previous principal 

residence’ and the ‘current principal residence’ have the same physical 

address in Texas, should not result in one losing his or her homestead 

protection because of a divestiture in a divorce proceeding.

Debtor cites no authority in support of his transformation theory to bring the Meadow Hill 

Property within the § 522(p)(2)(B) exception. Additionally, Debtor’s interpretation of § 

522(p)(2)(B) is contrary to the plain reading of the statute and case law, which suggests that the 

“previous” residence (acquired outside the 1215-day period) was sold, and then the sale proceeds 

from the previous residence are rolled over and used within the 1215-day period to acquire the 

87 In re Presto, 376 B.R. at 576. 88 Debtor’s Brief at pgs. 21–22. 89 11 U.S.C. § 522(p)(2)(B) (emphasis added).

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“current” residence.90 Moreover, § 522(p)(2)(B) requires that “the debtor’s previous and current 

residences” be located in the same state, which again suggests two different residences. Thus, the 

Court concludes that Debtor’s contention that he is entitled to the § 522(p)(2)(B) exception to § 

522(p)(1) is not persuasive and lacks merit.

Based on the Court’s detailed review and analysis of Presto, the Court finds and concludes 

that the Presto court’s analysis and application of § 522(p) is well-reasoned, sound, and persuasive.

Thus, the Court finds and concludes that Debtor’s argument—that Presto is flawed and should not 

be follow—lacks merit. 

5. Conclusion Regarding Homestead Objection

For all of the foregoing reasons and based on the Court’s review and careful consideration 

of the Homestead Objection, Debtor’s Response, Debtor’s Brief, Creditor’s Reply, testimony of 

Debtor, exhibits admitted into evidence, and the arguments of counsel, the Court finds and 

concludes that Creditor’s Homestead Objection is SUSTAINED, in part, solely to the extent that 

the value of Ms. Cooper’s 50% community property interest in the Meadow Hill Property that 

Debtor acquired within 1215-days of the Petition Date exceeds $189,050.

A hearing (the “Valuation Hearing”) will be set to determine (i) the value of Ms. Cooper’s 

50% community property interest in the Meadow Hill Property that Debtor acquired within the 

1215-day period under § 522(p)(1); and (ii) if such determined value exceeds $189,050.

90 See Rogers I, 354 B.R. at 797 (§ 522(p)(2)(B) “allows for a roll-over of interest transferred from the sale of a 

debtor's previous homestead . . . and used the proceeds to purchase a new homestead within the same state . . . .”); In 

re Blair, 334 B.R. 374, 377 (Bankr. N.D. Tex. 2005) (“rollover by debtors of the equity in one home to another home 

located in the same state. A debtor is not subject to the homestead cap if he takes the proceeds of his first residence 

and reinvests them in a second residence.”); In re Summers, 344 B.R. 108, 112 (Bankr. D. Ariz. 2006).

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B. Personal Property Objection

Federal Rule of Bankruptcy Procedure 4003(a) provides “[a] debtor shall list the property 

claimed as exempt under § 522 of the Code on the schedule of assets required to be filed by Rule 

1007.”91 Debtor’s claimed exemptions were timely filed by Debtor.92 Creditor argues, however,

that Debtor failed to adequately describe or attach individual values to the personal property items

claimed as exempt.93 The Court disagrees. 

First, the Court finds that Debtor’s Schedule A/B and Schedule C provide sufficient detail 

of Debtor’s personal property and claimed exemptions to put the Chapter 7 Trustee, creditors, and 

parties-in-interest on notice of questionable exemption claims. Second, Creditor filed a Rule 2004 

Motion94 seeking, in part, “information related to Debtor’s assets [and] potential objections to 

Debtor’s claims of exemptions.”95 The Court granted Creditor’s Rule 2004 Motion96 and, 

thereafter, on April 23, 2024, Creditor extensively examined Debtor. Finally, Creditor failed to

offer any credible evidence to satisfy its burden to prove by a preponderance of the evidence that 

Debtor’s claimed personal property exemptions should be disallowed.97 The mere filing of an 

objection is not controverting evidence, and without controverting evidence, the sworn schedules 

carry the day. 

For all the foregoing reasons and based on the Court’s review and careful consideration of 

the Personal Property Objection, Debtor’s Response, Debtor’s Brief, Creditor’s Reply, testimony 

91 FED. R. BANKR. P. 4003(a). 92 Creditor Ex. 17, pgs. 10–23. 93 Objection to Exemptions at pgs. 18–19, ¶¶ 41–42; Creditor’s Reply at pg. 19, ¶¶ 27–28. 94 Motion for Order Directing Agreed Examination of Debtor and Production of Documents Pursuant to Bankruptcy 

Rule 2004, ECF No. 15 (the “Rule 2004 Motion”). 95 ECF No. 15 at pg. 4, ¶ 12. 96 ECF No. 17. 97 The party objecting to an exemption in bankruptcy has the burden of proving by a preponderance of the evidence 

that the exemption is improper. In re Cipolla, 476 F. App'x 301, 305 (5th Cir. 2012); FED. R. BANKR. P. 4003(c) 

(burden of proof).

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of Debtor, exhibits admitted into evidence, and the arguments of counsel, the Court finds and 

concludes that Creditor’s Personal Property Objection is OVERRULED, and Debtor’s claimed 

personal property exemptions are GRANTED.

IV. CONCLUSION

For all the foregoing reasons, it is, hereby, ORDERED as follows:

i. Creditor’s Homestead Objection is SUSTAINED, in part, solely to the extent that 

the value of Ms. Cooper’s 50% community property interest in the Meadow Hill 

Property acquired by Debtor within 1215-days of the Petition Date exceeds 

$189,050;

ii. Debtor’s Homestead Exemption for his 50% community property interest in the 

Meadow Hill Property that he had acquired prior to 1215-days of the Petition Date

is GRANTED, in full;

iii. Creditor’s Personal Property Objection is OVERRULED, and Debtor’s claimed 

Personal Property Exemptions are GRANTED, in full;

iv. Debtor and Creditor shall meet and confer to set the date and time for the Valuation 

Hearing related to the Homestead Objection; and

v. This Memorandum Opinion and Order constitutes an interlocutory order subject to 

the entry of a final order following the Valuation Hearing.

### END OF ORDER ###

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