Opinion ID: 196328
Heading Depth: 3
Heading Rank: 3

Heading: Accounting Firm

Text: 33 At oral argument, MHFA conceded that the debtor made its $25,000 prepetition payment to Coopers & Lybrand for audit services which were completed prior to the chapter 11 petition. See supra Section I.A. Consequently, the debtor retained no legal or equitable interest in these monies as of the date of the chapter 11 petition; and no right to, or interest in, these monies ever became property of the chapter 11 estate. See Bankruptcy Code Sec. 541(a)(6). MHFA could point to no conceivable basis upon which the bankruptcy court, at this point in time, could direct Coopers & Lybrand to turn over any part of its $25,000 retainer to the chapter 7 estate. See id. Sec. 542, 11 U.S.C. Sec. 542 (third party, in possession of property of estate, may be compelled to turn it over to trustee); United States v. Whiting Pools, Inc., 462 U.S. 198, 103 S.Ct. 2309, 76 L.Ed.2d 515 (1983) (even a secured party in possession of collateral constituting property of the estate is subject to Sec. 542 turnover order). Moreover, MHFA has suggested no other basis upon which either the debtor in possession or the chapter 7 trustee could have avoided the prepetition transfer to Coopers & Lybrand. See, e.g., id. Secs. 544 (avoidance of unperfected liens), 545 (avoidance of statutory liens), 547 (avoidance of preferences), 548 (avoidance of fraudulent transfers). Moreover, the limitations period for any such avoidance action would appear to have lapsed. See id. Sec. 546(a)(1) (two years after order for relief); compare also In re Ollada, 114 B.R. 654, 655 (Bankr.E.D.Mo.1990) (Sec. 542 has no comparable limitations period) with In re De Berry, 59 B.R. 891, 898 (Bankr.E.D.N.Y.1986) (Sec. 542 turnover motion must be made within reasonable time). 20 34 In all events, MHFA may have a direct cause of action against Coopers & Lybrand outside the bankruptcy court. Cf. In re Indian Motocycle Assocs. III Ltd. Partnership, 161 B.R. at 868 ([S]uch action ... would involve only rights among nondebtors in a case having no prospects of reorganization [and] I have previously granted MHFA relief from [the automatic] stay.); see generally In re McBee, 714 F.2d at 1326 (noting that perfected security interest survives conveyance of collateral). The automatic stay afforded no protection to Coopers & Lybrand, see Bankruptcy Code Sec. 362, and MHFA may seek to execute its perfected lien directly. At least this procedure would allay a troublesome aspect of the present case, in that Coopers & Lybrand has never received either notice or a hearing on MHFA's allegedly superior claim to the $25,000. III