Ch 7 Asset case - Opinion on what I should offer TT for land

[captss]

I am in Texas and my Ch 7 case was discharged Aug 2010 but as an asset case remains open. I own 50% in 10 acres of farm land. Another person farms the land and we receive $0 for this - we just call it an even trade for keeping it mowed! Anyway, listed in BK docs at a total value of $79,000. Taxable value $970 due to AG Exemption. TT sent an offer letter to my partner Feb 2011, offering to sell my 50% for $14,000. Partner declined and there has been no activity on the BK case since.

My discharged debts were $74,000 so I know the TT has an interest in selling it for as much as possible to pay some to the creditors. However, I don't think selling half-interest in some farm land will be an easy task - I could be wrong. We purchased it as an investment and I would like to keep my ownership.

Should I make an offer, a low-ball offer or do I wait and hope she abandons the property?

Thanks for any insight anyone may have!

[despritfreya]

I am in Texas and my Ch 7 case. . . (The bk estate owns) 50% in 10 acres of farm land. (I) listed (the land) in BK docs at a total value of $79,000. . . TT sent an offer letter to my partner Feb 2011, offering to sell my 50% for $14,000. Partner declined. . . I know the TT has an interest in selling it for as much as possible to pay some to the creditors. However, I don't think selling half-interest in some farm land will be an easy task. . . I would like to keep my ownership. Should I make an offer, a low-ball offer or do I wait and hope she abandons the property?

You can send an offer to the Trustee of what you think the ½ interest is worth. Obviously it may not be worth the $14k offer the Trustee made to the co-owner, but I would think it is worth more than the AG exemption value. The Trustee will do one of the following:

1. Accept the offer with no strings;
2. Use the offer as an opening bid for the ½ interest and you can show up at the auction and bid higher if there are any other bids;
3. Ignore the offer and sell the ENTIRE property to the highest bidder. Once sold your partner will receive ½ the proceeds and the balance will be used to pay the creditors; OR
4. Realize the property is of inconsequential value and abandon it.

Only you can determine how much to offer if you go that route. As to the abandonment, the Trustee could sit on the asset for a very long time before she does anything.

Des.

[captss]

You can send an offer to the Trustee of what you think the ½ interest is worth. Obviously it may not be worth the $14k offer the Trustee made to the co-owner, but I would think it is worth more than the AG exemption value. The Trustee will do one of the following:

1. Accept the offer with no strings;
2. Use the offer as an opening bid for the ½ interest and you can show up at the auction and bid higher if there are any other bids;
3. Ignore the offer and sell the ENTIRE property to the highest bidder. Once sold your partner will receive ½ the proceeds and the balance will be used to pay the creditors; OR
4. Realize the property is of inconsequential value and abandon it.

Only you can determine how much to offer if you go that route. As to the abandonment, the Trustee could sit on the asset for a very long time before she does anything.

Des.

Des,
Thanks for your insight. As a long time lurker, I have read many of your posts and certainly trust in what you are saying. Just doesn't seem fair my partner can have his 50% sold out from under him. I will just have to mull over my options. Thanks again!

[AngelinaCat]

I don't think a trustee can do that either. It sounds like you have an undivided half-interest in the land, and receive on rental monies for allowing the farmer to use it. Although you could figure out what it would cost you and your partner to keep the land trimmed and mowed yourselves, and what possibly you would derive in rent. I can see how you would consider it a 'draw'. We used to have farmland, and what we rented it out for paid the land taxes.

But I digress. If the trustee wants to sell your half, he/she would have to get (or have you do it) a surveyor to come out and survey the land and divide the parcel into two pieces, with new legal descriptions. This is VERY expensive, and I cannot perceive a trustee wanting to go through this with this economy. Depending on where this land is located, it could either raise the value, or lower it. If the farmer using it, is being able to make a decent living, then losing half the acreage would damage that person also.

Lots to think about.

Good luck!

[despritfreya]

Cat,

FYI:

Pursuant to 11 USC 363(h) a trustee can sell both the estate's interest and any interest of a co-owner in property in which the debtor has an undivided interest as a tenant in common, joint tenant or tenant by the entirety if

1) partition in kind is not possible;
2) the sale of the undivided interest held by the estate would produce significantly less for the estate than the sale of the entire parcel;
3) the benefit to the estate outweighs the detriment to the co owner; and
4) the property is not used in the production, transmission or distribution of energy services.

Sales like this happen all the time where the co-owner decides not to play ball with a Trustee. Not fair, yes but. . .

Des.

[AngelinaCat]

Hi Des.

I am very surprised at that at that news. It is very unfair that innocent parties can be so harmed. But, I know that 'life ain't fair'. I used to tell my students that when I was working at the high school....

If I have given out bad advice, I apologize. It still seems that the affected parties ought to be able to appeal, though....