United States District Court, N.D. Texas, Fort Worth Division
MEMORANDUM OPINION AND ORDER
MCBRYDE, UNITED STATES DISTRICT JUDGE.
for consideration the appeal of Misty Chaney Brady,
appellant, from an order signed March 15, 2019, by the United
States Bankruptcy Court for the Northern District of Texas,
Fort Worth Division, sustaining objections to claim of
exemption in the above-referenced Chapter 7 case.
6 at 4-7. The court, having considered the brief of
appellant, the briefs of appellees, Maxus Healthcare
Partners, LLC, (``Maxus"), and John Dee Spicer, Chapter
7 Trustee ("Trustee"), the reply brief, the record,
and applicable authorities, finds that the order from which
appeal is taken should be affirmed.
March 20, 2017, appellant filed a voluntary petition under
Chapter 13 of the United States Bankruptcy Code. Doc. 6 at
22. On April 27, 2017, the case was converted to Chapter 11.
Id. at 25. On October 24, 2017, appellant amended
her Schedule C exemptions to add exemptions of her equity
interests in Zera, Inc., Ricky Chaney Plumbing, LLC, BP
Chaney, LLC, and Texas RHH, LLC ("closely held
entities"). Id. 37, 146. No. objections were
made within the thirty-day period set by Bankr. R. 4003(b).
December 12, 2018, appellant's case was again converted,
this time to Chapter 7. Doc. 6 at 78, 171-72. Notice was
given that the § 341 meeting of creditors was to be held
January 8, 2019. Id. at 78. On February 7, 2019,
Maxus filed its objection to appellant's claim of
exemptions. Id. at 86, 176-79. And, on February 8,
2019, the Trustee filed his objection to appellant's
claim of exemptions. Id. at 86, 180-83. Appellant
filed responses to the objections. Id. at 88,
184-95. Maxus and the Trustee filed replies. Id. at
bankruptcy court heard the objections on March 6, 2019. Doc.
6 at 89, 209-52. By order signed March 15, 2019, the
bankruptcy court sustained the objections. Id., at
89. On March 29, 2019, appellant filed her notice of appeal.
Id. at 90.
Issue on Appeal
sole issue on appeal is whether the bankruptcy court erred in
sustaining the objections to appellant's claimed
exemptions to her interest in the closely held entities.
Appellant maintains that because there were no timely
objections to her claimed exemptions while her case was
pending under Chapter 11, her interest in the closely held
entities was no longer part of the bankruptcy estate and the
conversion to Chapter 7 could not restart the clock for
filing objections thereto.
Standard of Review
district court reviews a bankruptcy court's decisions as
an appellate court, applying the same standards of review.
Webb v. Reserve Life Ins. Co. (In re Webb), 954 F.2d
1102, 1103-04 (5th Cir. 1992). To the extent the appeal
presents questions of law, the bankruptcy court's order
is subject to de novo review. Pierson &
Gaylen v. Creel & Atwood (In re Consolidated Bancshares,
Inc.), 785 F.2d 1249, 1252 (5th Cir. 1986). Findings of
fact, however, will not be set aside unless clearly
erroneous. Memphis-Shelby County Airport Auth. v. Braniff
Airways, Inc. (In re Braniff Airways, Inc.),
783 F.2d 1283, 1287 (5th Cir. 1986) .
522 of the Bankruptcy Code provides, in pertinent part:
The debtor shall file a list of property that the debtor
claims as exempt . . . Unless a party in interest objects,
the property ...