Opinion ID: 469162
Heading Depth: 2
Heading Rank: 3

Heading: Abandonment of Claim by the Trustee

Text: 34 Fehl contends that even if her emotional distress claim did become part of the bankruptcy estate, the trustee in bankruptcy abandoned the claim to her. Fehl argues that the trustee's act of signing the stipulation in 1982 represented an abandonment, and that the stipulation created a binding contract guaranteeing her the right to refile her claim without prejudice. Westinghouse contends that the purpose of the stipulation was to preserve the status quo, and that the trustee did not abandon the claim. 35 However, we need not address the trustee's intent in signing the stipulation. 11 U.S.C.A. Sec. 554 (West Supp.1985) governs the abandonment of estate property. 4 Section 554 states: 36 (a) After notice and a hearing, the trustee may abandon any property of the estate that is burdensome to the estate or that is of inconsequential value and benefit to the estate. 37 (b) On request of a party in interest and after notice and a hearing, the court may order the trustee to abandon any property of the estate that is burdensome to the estate or that is of inconsequential value and benefit to the estate. 38 .... 39 (d) Unless the court orders otherwise, property of the estate that is not abandoned under this section and that is not administered in the case remains property of the estate. (Emphasis added). 40 Bankruptcy Rule 6007, implementing Section 554, states in part: Unless otherwise directed by the court, the trustee ... shall give notice of a proposed abandonment ... to all creditors ... Therefore, there is no abandonment without notice to creditors. 4 Collier on Bankruptcy p 554.01 at 554-3 (15th ed. 1985); In re Tucci, 47 B.R. 328, 331 (Bankr.E.D.Va.1985) (party proposing abandonment must give notice). 41 Nothing in the record indicates that creditors were notified of the trustee's intent to abandon the emotional distress claim. Even if the trustee intended abandonment by signing the 1982 stipulation, the agreement would be of no effect without prior notice to creditors. The emotional distress claim thus remained property of the bankruptcy estate. 42 AFFIRMED. 43