Trustee ???s

[taximom]

The trustee of our bankruptcy had us turn over some stock certificates in November 2011 which we did. Now we have received a motion that we have to liquidate and was returned the stock certificates 9 months later. We were discharged Dec 2011. Trustee was in agreement that she would liquidate then we would not have to pay capital gains etc, now it has changed.

Trustee claims it is too hard to liquidate stock.....hmmmmm.

The stock price has gone up and now the other stocks we were holding onto for our $10,000 we get to retain is now in jeopardy...

Can they do this........???

[tobee43]

i'm not really certain what exactly you are asking.

in as much as the stock certificates, the trustee was never in a position to be able to cash them in on your behalf. there is so much paperwork and transferring to be done it would be ridiculous as you would have to assign it to trustee paperwork would go back and fro etc. you would have to cash them in yourself and then hand over the money. so it's not that it would be too hard for the trustee to liquidate the stock themselves, it would be just about impossible. you would have to do it, and again hand over whatever money requested by the trustee.

i'm not exactly certain again about what you mean about "now the other stocks we were holding onto for our $10,000 we get to retain is now in jeopardy..." did you have other stock as well that the trustee had interest in and now wants that money?

and welcome to the forum!

[HHM]

Agree, not quite sure what you are asking.

Note, the discharge has nothing to do with the administration of the assets of your case and the trustees duty to pay the included creditors from the sale of those assets. Asset bankruptcy cases (meaning, cases in which the trustee is able to get money to pay creditor claims) can stay "open" for months and years.

What sort of company are we talking about here? Are the stocks for a publicly traded company or a privately held company? If publicly traded, the trustee should have been able to liquidate, if privately held, that is a real big hassle.

I would speak to a tax professional about the cap gain issue? Since the stock is property of the BK estate regardless of who actually liquidates, there shouldn't be a cap gain issue either way.

As for the appreciation in value, that BK gets it. Since, upon filing BK, the ownership interest of the stock passes to the BK estate, the estate retains any post filing appreciation. Had the trustee sold the stock 9 months ago, you wouldn't have seen any appreciation anyway. Where appreciation gets thorny is if the asset is exempt at the time of filing BK, but then increases in value post filing such that there is now non-exempt equity, but that is not the issue here, no part of the stock value was exempt.