Asset gained value after discharge (Trustee turned in a no asset)

[Finn]

my question:
Chapter 7 was filed, a manuscript of a book (literally nobody was interested in buying the book) was scheduled with 100.00$ and no other assets existed (this was before the first cred. meeting with the trustee). The trustee turned in a no asset and the discharge was granted. Now a company is interested in buying the manuscript for a significant sum (unforeseeable for trustee and debtor).
Since the discharge was granted, can the trustee recover the royalties as property of the estate (by filing an adversary case)? Or can the debtor keep the royalties?

I'm not sure about this because the manuscript was already part of the estate but the discharge was granted.
What happens exactly to the estate after a discharge in a no asset chapt. 7?

edit:
sorry for putting this in the "before the discharge"-section, i have overlooked the categories.

[justbroke]

If the Trustee abandoned the property by filing a Final Report of No Distribution, then the estate no longer has claim to the Manuscript. The property reverted back to the Debtor.

[Finn]

Thanks for the explanation.
Is it relevant that the trustee only technically abandoned the asset by turning in a no asset? I got the term ("technically abandoned") from Ginsberg & Martin on Bankruptcy but I have no idea if this makes a difference?

[justbroke]

Yes, some courts have ruled that even the final report of no distribution in a no asset case doesn't necessarily bind the property as abandoned. The real thing to do is to wait for the discharge. Unless the Trustee specifically files a motion to abandon, you are really, technically, at the mercy of the closing.

I mean, the Trustee could withdraw their report and try to claw back at the asset. There isn't really anything stopping that except the case being closed. This is where the practice in reality and the practice under the written letter diverge. I have written before that the only "true" safe thing is to wait for the case to close. I will concede that the Trustee could "change their mind" and withdraw their report of no distribution at any time before closing the case. I think this is how some Trustee's operate in order to snatch tax refunds this time of year, in an otherwise no asset case.

The more devious side of me says that the Trustee might actually try to claw back at the asset, but technically, the asset's value didn't change until post-petition, so I think you could fight them off anyhow.

[Finn]

The discharge was already granted! Reasons for a revocation of the discharge are not given, so the trustee can't do anything after the discharge unless the case has not been closed the same day the discharge was granted?!
Since the case usually gets closed on the same day as the discharge is granted, the trustee can't recover anything?!

[Dst1]

my question:
was scheduled with 100.00$ and no other assets existed (this was before the first cred. meeting with the trustee). The trustee turned in a no asset and the discharge was granted. Now a company is interested in buying the manuscript for a significant sum (unforeseeable for trustee and debtor).
.

A bk case can be reopened even if it is closed. The biggest problem you have in these type of cases is the issue I bolded.

Remember that fraud changes everything. I'm not suggesting that true for you. But if you happen to owe a lot of money to someone that was discharged they will get mighty suspicious if you magically happen to have a big windfall right after BK.

[justbroke]

If your case discharged and closed the same day, then you have the perfect reason to know that your assets are yours, once again. However, not all cases "autoclose" after the discharge. Did your case autoclose, or otherwise closed already?

[Finn]

@justbroke: my case was autoclosed, so I'm (hopefully, you never ever know) on the safe side. thank you!

@Dst1: surley this can make some people suspicious, but not in this case

[justbroke]

I think since your case is closed, the only thing the Trustee could do is file a Motion to vacate Close due to excusable error or fraud. Fraud aside, the fact that the Trustee didn't investigate the asset and abandoned it in the Final Report, doesn't sound "excusable" to me.

Best wishes!