Analysis

For The Benefit of the Bankruptcy Estate

Stephen Balsley, bankruptcy trustee, states in "Exhibit A, Tasks Performed," of his Final Report:

..... " which initially appeared to have significant equity in it.  The property was scheduled as having a value of $42,000.00 and subject to a mortgage of $30,700.00. "

Calculations: $42,000.00, with paying off the mortgage of $30,700.00, leaves $11,300.00.  

However, the trustee says that a purchaser was found for the property at $40,000.00.  That knocks $2,000.00 off what he believed the property would sell for.  From page 6 of the Final Report, it lists $3,315.30 as "Settlement charges to seller."  We presume this was the realtor's commission.  Also on page 6, we learned that $924.03 was paid in County taxes, and $20.00 for an express delivery fee of the mortgage payoff.  The calculations are now:

$40,000.00

- 30,700.00 Trustee's estimated payoff of mortgage

-   3,315.30  Settlement charges to seller

-      924.03  Taxes

-        20.00  Express Delivery service

 $5,040.67   Balance

The Trustee's explanation in Exhibit A is to explain why there was only $850.95 remaining.  HOWEVER, the trustee's fees, commission and expenses, as listed on page 9 of the Final Report, (a portion which is shown below), are $6,683.14.  Therefore, if this sale had gone as he originally planned, it still would not have resulted in any proceeds remaining "for the benefit of the bankruptcy estate."  If the sale had gone as planned, the trustee would have been $1,642.47 SHORT.  And thus, as the trustee stated, "There were no funds available for distribution to creditors."  

There would not have been any funds available for distribution to creditors according to his original plan either.

This report was certified by Assistant U.S. Trustee, Sheree Dandurand, and approved by Judge Manuel Barbosa.  This is a case that evidences how the trustee, Stephen Balsley, sold secured property for his personal enrichment with the approval of the Assistant U.S. Trustee, and the bankruptcy judge.