In re: Robert Underhill v.

ELECTRONIC CITATION: 2013 FED App.0004P (6th Cir.)
File Name: 13b0004p.06
BANKRUPTCY APPELLATE PANEL OF THE SIXTH CIRCUIT
In re: ROBERT D. UNDERHILL and )
BETH UNDERHILL, )
) No. 12-8045
Debtors. )
______________________________________
Appeal from the United States Bankruptcy Court
for the Southern District of Ohio
Case No. 10-10061
Submitted: August 20, 2013
Decided and Filed: September 16, 2013
Before: EMERSON, LLOYD, and McIVOR, Bankruptcy Appellate Panel Judges.
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COUNSEL
____________________
ON BRIEF: David S. Blessing, THE BLESSING LAW FIRM, Cincinnati, Ohio, for Appellants.
Jody Michelle Oster, THE HUNTINGTON NATIONAL BANK, Columbus, Ohio, for Appellee.
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____________________
OPINION
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MARCI B. McIVOR, Chief Bankruptcy Appellate Panel Judge. Robert and Beth Underhill
(“Debtors”) appeal the bankruptcy court’s order granting Huntington National Bank’s motion to
reopen Debtors’ bankruptcy case. After Debtors received their discharge, Golf Chic Boutique, LLC,
(“Golf Chic, LLC”) an LLC in which Debtor Beth Underhill was the sole member, filed a claim for
tortious interference against several entities. The lawsuit was settled and $80,000 was awarded to
the plaintiff LLC. However, the settlement check was made payable to Debtor Beth Underhill and
her attorney, rather than to the LLC. Huntington National Bank discovered that Debtor Beth
Underhill had received the settlement proceeds and moved to reopen the Debtors’ case so that the
proceeds of the settlement could be administered as an asset of the bankruptcy estate. For the
reasons that follow, the Panel affirms the bankruptcy court’s order granting Huntington National
Bank’s motion to reopen the Debtors’ bankruptcy case. The Panel also remands this matter to the
bankruptcy court for a determination as to the value of Debtor Beth Underhill’s membership interest
in Golf Chic, LLC, based on Golf Chic LLC’s recovery on its lawsuit.
STATEMENT OF ISSUES
There are two issues on appeal. The first issue is whether the bankruptcy court abused its
discretion in granting Huntington National Bank’s motion to reopen. The second issue is whether
the bankruptcy court erred in ruling that all of the settlement proceeds received by Debtor Beth
Underhill, as the sole member of Golf Chic, LLC were property of the Debtors’ bankruptcy estate.
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JURISDICTION AND STANDARD OF REVIEW
The Bankruptcy Appellate Panel of the Sixth Circuit has jurisdiction to decide this appeal.
The United States District Court for the Southern District of Ohio has authorized appeals to the
Bankruptcy Appellate Panel, and none of the parties has timely elected to have this appeal heard by
the district court. 28 U.S.C. §§ 158(b)(6), (c)(1). A bankruptcy court’s final order may be appealed
as of right pursuant to 28 U.S.C. § 158(a)(1). For purposes of appeal, an order is final if it “ends the
litigation on the merits and leaves nothing for the court to do but execute the judgment.” Midland
Asphalt Corp. v. United States, 489 U.S. 794, 798, 109 S. Ct. 1494, 1497 (1989) (citation and
quotation marks omitted). An order granting a motion to reopen the bankruptcy case to administer
an asset is a final and appealable order, because the determination that the trustee may administer
the asset as property of the estate is conclusive on the merits. See, e.g., Bonner v. Sicherman (In re
Bonner), 330 B.R. 880 (B.A.P. 6th Cir. 2005) (table).
A decision on a motion to reopen is within the sound discretion of the bankruptcy court. The
reviewing court should not set aside the bankruptcy court’s decision, absent an abuse of discretion.
Smyth v. Edamerica, Inc. (In re Smyth), 470 B.R. 459, 461 (B.A.P. 6th Cir. 2012). An abuse of
discretion occurs when the bankruptcy court “applies the incorrect legal standard, misapplies the
correct legal standard, or relies upon clearly erroneous findings of fact.” Id. (citing Schenck v. City
of Hudson, 114 F.3d 590, 593 (6th Cir. 1997)). “The question is not how the reviewing court would
have ruled, but rather whether a reasonable person could agree with the bankruptcy court’s decision;
if reasonable persons could differ as to the issue, then there is no abuse of discretion.” Barlow v.
M.J. Waterman & Assocs., Inc. (In re M.J. Waterman & Assocs., Inc.), 227 F.3d 604, 608 (6th Cir.
2000).
Determinations as to whether property forms a part of the bankruptcy estate are conclusions
of law that are reviewed de novo. Mueller v. Hall (In re Parker), No. 06-8053, 2007 WL 1376081,
at *2 (B.A.P. 6th Cir. May 10, 2007) (table). “Under a de novo standard of review, the reviewing
court decides an issue independently of, and without deference to, the trial court’s determination.”
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Menninger v. Accredited Home Lenders (In re Morgeson), 371 B.R. 798, 800 (B.A.P. 6th Cir. 2007)
(citation omitted). Essentially, the reviewing court decides the issue “as if it had not been heard
before.” Mktg. & Creative Solutions, Inc. v. Scripps Howard Broad. Co. (In re Mktg. & Creative
Solutions, Inc.), 338 B.R. 300, 302 (B.A.P. 6th Cir. 2006). “No deference is given to the trial court’s
conclusions of law.” Id.FACTS
On January 6, 2010, David R. Underhill and Beth Underhill filed a voluntary petition under
Chapter 7 of the Bankruptcy Code. Harold Jarnicki was appointed Chapter 7 Trustee.
On January 26, 2010, the Debtors filed their bankruptcy schedules. On Schedule B, the
Debtors listed their 100% interest in a number of businesses including Golf Chic Boutique, LLC.1
Golf Chic, LLC is not a debtor in bankruptcy. Schedule B states that the Debtors have a 100%
ownership and membership interest in Golf Chic, LLC and that Golf Chic, LLC has no value. The
Debtors also listed all secured and unsecured claims of Golf Chic, LLC. The Debtors further
represented that they held no contingent or unliquidated claims on the petition date. In other words,
the Debtors represented that neither they, nor Golf Chic, LLC, owned any causes of action.
Schedule D lists Huntington National Bank (“Creditor Bank”) as a creditor holding a claim
totaling $25,000, secured by a lien on all of Golf Chic, LLC’s property. Debtor Beth Underhill
personally guaranteed repayment of the obligations of Golf Chic, LLC to Creditor Bank pursuant to
a Commercial Guaranty.
In addition to Creditor Bank’s secured claim, it also holds a non-priority unsecured claim in
the amount of $105,000, by virtue of a loan and lease made to Underhill Landscaping, Inc.
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The other interests include: (1) 100% stock in Underhill Landscaping, Inc.; (2) 100% stock
in Cincinnati Landscape Design Build Group; and (3) 100% ownership interest in Bud Properties,
LLC. All are listed as having zero value.
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On April 29, 2010, the Chapter 7 Trustee filed a report of no distribution.
On May 19, 2010, an order was entered discharging the Debtors.
On June 15, 2010, the Debtors’ bankruptcy case was closed.
On October 25, 2010, Golf Chic, LLC filed a complaint in the Hamilton County, Ohio Court
of Common Pleas against The Ladies Pro Shop, Inc., Golf Gear, Inc., and Andrea Walch (“Hamilton
County Defendants”) (Case No. A1009767) (“Hamilton County Action”). The Debtors were not
named as plaintiffs in the Hamilton County Action. Golf Chic, LLC claimed that in 2009 the
Hamilton County Defendants “embarked on an unlawful plan and conduct to disrupt price
competition from Golf-Chic by trying to drive Golf-Chic out of business.” Docket No. 75,
Complaint, Exh. D, p. 2, ¶ 7. In the Hamilton County Action, Golf Chic, LLC described how the
Hamilton County Defendants attempted to disrupt Golf Chic, LLC’s business by contacting suppliers
and vendors by e-mail and phone asking those suppliers and vendors to cease selling products to
Golf Chic, LLC, resulting in lost income and business. As a result of the Hamilton County
Defendant’s actions, Golf Chic, LLC requested an award of damages exceeding $25,000. In
connection with the Hamilton County Action, Debtor Beth Underhill and Hamilton County
Defendant, Andrea Walch, testified under oath in a deposition.
On February 17, 2012, the Hamilton County Defendants issued a settlement check in the
Hamilton County Action for the sum of $80,000, made payable to “The Blessing Law Firm Trust
Account.” Id. at Exh. E. Copies of the settlement check obtained during discovery reflect that the
proceeds were distributed on February 28, 2012. Debtor Beth Underhill individually received
$44,985, and William H. Blessing Office Account received the sum of $35,015.
On February 23, 2012, the Debtors and Golf Chic, LLC executed a “Full and Final Release,”
releasing the Hamilton County Defendants and Old Dominion Insurance Company from claims
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resulting from any and all facts set forth in the Hamilton County Action. The Full and Final Release
was signed by the Debtors.
On February 28, 2012, Creditor Bank learned of the settlement entered into between Golf
Chic, LLC and the Hamilton County Defendants. Creditor Bank filed an action in Franklin County
Court of Common Pleas against the Debtors, The Blessing Law Firm and William H. Blessing, and
others, requesting a turnover of the settlement proceeds.
On July 25, 2012, Creditor Bank filed a motion to reopen the Debtors’ bankruptcy case for
cause in order to administer undisclosed assets. On August 30, 2012, the Debtors filed an objection
to the Creditor Bank’s motion to reopen.
On October 1, 2012, the bankruptcy court held a hearing on Creditor Bank’s motion to
reopen. At the conclusion of the hearing, the bankruptcy court granted Creditor Bank’s motion to
reopen.
On October 10, 2012, the bankruptcy court entered an order in accordance with its ruling.
Relying on evidence submitted by the parties from the Hamilton County Action, including affidavits
and deposition testimony, the bankruptcy court held that Creditor Bank
met its burden of demonstrating that the Claim was sufficiently rooted
in the Debtors’ pre-bankruptcy past so as to constitute property of the
estate and that the $80,000 settlement funds paid by or on behalf of
the [Hamilton County] Defendants to settle the Claim and the
Hamilton County Action also constitute property of the estate. 11
U.S.C. § 541. Mueller v. Hall (In re Parker), 2007 Bankr. LEXIS
1523, 2007 WL 1376081 (B.A.P. 6th Cir. 2007). . . . [T]he testimony
of Debtor Beth Underhill in addition to her Affidavit as well as the
testimony of the Defendants in the Hamilton County Action make
clear that events relating or giving rise to the Claim occurred as early
as April of 2009, continued later into 2009 and in 2010 subsequent to
the filing of the petition herein.
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(Docket No. 87, p. 4).
On October 24, 2012, the Debtors filed a timely appeal of the bankruptcy court’s order
granting Creditor Bank’s motion to reopen the Debtors’ bankruptcy estate to administer the
settlement proceeds.
DISCUSSION
There are two issues on appeal. The first issue is whether the bankruptcy court abused its
discretion in granting Creditor Bank’s motion to reopen. The second issue is whether the bankruptcy
court erred in ruling that all of the settlement proceeds received by Beth Underhill in her capacity
as the sole member of Golf Chic, LLC are property of the Debtors’ bankruptcy estate.
I. The bankruptcy court did not abuse its discretion in granting Creditor Bank’s motion to
reopen.
Section 350(b) of the Bankruptcy Code provides that “[a] case may be reopened in the court
in which such case was closed to administer assets, to accord relief to the debtor, or for other cause.”
11 U.S.C. § 350(b); Fed. R. Bankr. P. 5010. Section 350 “confers upon the bankruptcy court broad
discretion in determining whether to reopen a case and its decision to grant or deny a motion to
reopen is binding absent a clear abuse of discretion.” Mead v. Helm, No. 88-105, 1989 WL 292, at
*3 (6th Cir. Jan. 4, 1989) (table) (citing Rosinski v. Boyd (In re Rosinski), 759 F.2d 539, 540-41 (6th
Cir. 1985)). Motions to reopen are decided on a case-by-case basis after the bankruptcy court weighs
the equities of the case. In re Jenkins, 330 B.R. 625, 628 (Bankr. E.D. Tenn. 2005). “[A]lthough
a motion to reopen is addressed to the sound discretion of the bankruptcy court, ‘the court has the
duty to reopen an estate whenever prima facie proof is made that it has not been fully administered.’”
Lopez v. Specialty Rests. Corp. (In re Lopez), 283 B.R. 22, 27 (B.A.P. 9th Cir. 2002) (citing Kozman
v. Herzig (In re Herzig), 96 BR 264, 266 (B.A.P. 9th Cir. 1989)). A bankruptcy court abuses its
discretion if it bases its ruling on an erroneous rule of law or where the Panel finds that the trial court
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has committed a clear error of judgment in the conclusion it reached. Lopez, 283 B.R. at 26. A court
also abuses its discretion if it denies a motion to reopen where “assets of such probability,
administrability and substance . . . appear to exist as to make it unreasonable under all the
circumstances for the court not to deal with them.” Herzig, 96 B.R. at 266.
In this appeal, Creditor Bank filed a motion to reopen the Debtors’ bankruptcy case in order
to administer undisclosed assets consisting of settlement proceeds it claims are part of the Debtors’
bankruptcy estate. The bankruptcy court did not abuse its discretion in reopening the bankruptcy
case because Creditor Bank established a prima facie claim that Debtor Beth Underhill received
$44,985 from the $80,000 settlement of a lawsuit filed by an LLC in which she was the sole member.
The existence of settlement proceeds from a claim held by the LLC, an entity the Debtors owned
entirely, is sufficient evidence of an asset to grant a motion to reopen.
The Debtors do not seriously challenge the bankruptcy court’s broad authority to reopen the
case. Instead the Debtors argue that the court wrongly concluded that the check received by Debtor
Beth Underhill was property of the bankruptcy estate. The Debtors raise two arguments as to why
the settlement proceeds are not property of their bankruptcy estate. The Debtors’ first argument is
that because the settlement proceeds were received after the Debtors received a discharge, the
proceeds are not property of the estate. The Debtors’ second argument is that even if a cause of
action against the Hamilton County Defendants existed at the time the Debtors filed for bankruptcy,
that cause of action was abandoned by the Trustee when the Debtors’ bankruptcy case was closed.
The Panel will address each of these arguments below.
A. The check received by Debtor Beth Underhill post-petition was evidence of an asset
to be administered by the bankruptcy estate.
The Debtors first argue that the portion of the settlement paid to Debtor Beth Underhill is not
property of the estate because it was paid to Debtor Beth Underhill long after the Debtors’
bankruptcy case was closed.
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Section 541 of the Bankruptcy Code defines property of the estate as “all legal or equitable
interests of the debtor in property as of the commencement of the case.” 11 U.S.C. § 541(a)(1). The
purpose of this broad definition is to “ ‘bring anything of value that the debtors have into the
[bankruptcy] estate.’ ” In re Webb, BAP No. 11-8016, 2012 WL 2329051, at *11 (B.A.P. 6th Cir.
Apr. 9, 2012) (table) (citing Lyon v. Eiseman (In re Forbes), 372 B.R. 321, 330 (B.A.P. 6th Cir.
2007)). It is well settled that “interests of the debtor in property” include causes of action. See U.S.
v. Whiting Pools, Inc., 462 U.S. 198, 205 n. 9, 103 S. Ct. 2309, 2314 (1983). Moreover, § 541(a)
“is not restricted by state law concepts such as when a cause of action ripens or a statute of
limitations begins to run, and ‘property of the estate’ may include claims that were inchoate on the
petition date.” Winick & Rich, P.C. v. Strada Design Assocs., Inc. (In re Strada Design Assocs.,
Inc.), 326 B.R. 229, 236 (Bankr. S.D.N.Y. 2005).
The seminal case discussing the scope of “property of the estate” is the Supreme Court’s
decision in Segal v. Rochelle, 382 U.S. 375, 86 S. Ct. 511 (1966). In Segal, the Supreme Court
determined that a loss-carryback refund claim is property of the estate because even though the
refund could not be claimed from the Government until a future time, it was“sufficiently rooted in
the pre-bankruptcy past” that it should be regarded as property of the bankruptcy estate.2 Segal,
382 U.S. at 379, 86 S. Ct. at 515. Since Segal was decided, courts have consistently held that causes
of action that are sufficiently rooted in the debtor’s pre-bankruptcy conduct are property of the estate
under § 541. See Mueller v. Hall (In re Parker), No. 06-8053, 2007 WL 1376081, at *7 (B.A.P. 6th
Cir. May 10, 2007) (table) (holding that a malpractice claim, that the debtor listed in the schedules
and caused debtor to file for bankruptcy is property of the estate); In re Richards, 249 B.R. 859, 861
(Bankr. E.D. Mich. 2000) (debtor’s asbestos injury claim is property of the estate where all allegedly
wrongful conduct that gave rise to the claim occurred prepetition).
Applying the Segal test to the evidence in the record, the Panel finds that the Debtors’ interest
in Golf Chic, LLC included a contingent, unliquidated value for the LLC’s claim for tortious
interference. The claim had its roots in prebankruptcy and pre-abandonment conduct such that the
Debtors’ interest in the LLC included some or all of the settlement proceeds. This property
2
Although Segal was decided under § 70a(5) of the Bankruptcy Act rather than the
Bankruptcy Code, courts follow the reasoning and adhere to the test enunciated in Segal when
determining whether a claim is property of the estate. See Parker, 2007 W L 1376081, at *7.
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constitutes property of the Debtors’ estate, but the value must be determined after payment of all
claims senior in priority to the Debtors’ membership interest. The evidence submitted by the parties
consisting of the deposition testimony of Debtor Beth Underhill, the deposition testimony of the
Hamilton County Defendant Andrea Walch, affidavits, email correspondence, and pleadings from
the Hamilton County Action all support the conclusion reached by the bankruptcy court that the
events giving rise to Golf Chic, LLC’s claim for tortious interference began in 2009 and culminated
in 2010 when the Hamilton County Defendants terminated their business relationship with Golf
Chic, LLC. Since Debtor Beth Underhill was the sole member of Golf Chic, LLC, her membership
interest potentially had value on the date she filed for bankruptcy and certainly before abandonment
because Golf Chic, LLC had a cause of action against the Hamilton County Defendants that was
undisclosed. Although the settlement of Golf Chic, LLC’s cause of action did not occur until after
Debtors’ case was closed, the settlement related to a prepetition cause of action held by the LLC, and
Debtor Beth Underhill received payment because of her prepetition interest in Golf Chic, LLC. The
bankruptcy court’s conclusion that the settlement proceeds were rooted in prepetition activities is
correct as a matter of law.
The Panel affirms the bankruptcy court’s conclusion that the settlement proceeds received
by Debtor Beth Underhill post-discharge were sufficiently rooted in the Debtors’ pre-bankruptcy past
to require administration of the net settlement proceeds by the bankruptcy estate.
B. Debtor failed to disclose that Golf Chic, LLC had a cause of action against the
Hamilton County Defendants. Therefore, the cause of action was not abandoned
when the bankruptcy estate was closed.
The Debtors’ second argument is that even if the settlement proceeds from the Hamilton
County Action would have been property of the bankruptcy estate, the cause of action is not an asset
because it was abandoned when the case was closed. Reopening a bankruptcy case to administer an
asset may only occur when there are assets that are not known to the trustee at the time the case was
closed. Collier on Bankruptcy, ¶ 350.03[1] (16th ed rev. 2012). Section 554 addresses this point
and states in relevant part that:
(c) . . . [A]ny property scheduled under section 521(a)(1) of this title
not otherwise administered at the time of the closing of a case is
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abandoned to the debtor and administered for purposes of section 350
of this title.
(d) . . . [P]roperty of the estate that is not abandoned under this
section and that is not administered in the case remains property of
the estate.
11 U.S.C. § 554 (emphasis added). Therefore, an asset or property of the estate that has been
concealed or not scheduled by the debtor will not be deemed to have been abandoned by the trustee
and belongs to the bankruptcy estate. The bankruptcy court record shows that the Debtors only
disclosed their 100% membership interest in Golf Chic, LLC and represented in their schedules that
they possessed no contingent or unliquidated claims. Under § 554 an unscheduled asset is not
automatically abandoned. The tort claim held by Golf Chic, LLC was not abandoned when the
Debtors’ trustee abandoned the membership interest to the Debtors because the tort claim was known
to Debtor Beth Underhill and affected the value of her membership interest. Placing a value of zero
on the LLC membership interest with knowledge of the tort claim and the failure to list such claim
constituted a failure to disclose the asset and warrants reopening and a determination by the
bankruptcy court of the value of the Debtors’ interest in the LLC.
II. Valuation of Debtor Beth Underhill’s membership interest in Golf Chic, LLC.
While the bankruptcy court correctly concluded that Creditor Bank’s motion to reopen should
be granted, it is unclear from the record what portion of the settlement proceeds from Golf Chic,
LLC’s lawsuit belongs to creditors of Golf Chic, LLC, and what portion belongs to creditors of Beth
and Robert Underhill. Some of the proceeds of the settlement are an asset of the bankruptcy estate
only because Debtor Beth Underhill is the sole member of Golf Chic, LLC. On the date the Debtors
filed for bankruptcy, Golf Chic, LLC had a cause of action against the Hamilton County Defendants.
Debtor Beth Underhill stated that her membership interest in Golf Chic, LLC had a value of zero,
but that statement was inaccurate because her membership interest potentially had value if Golf Chic,
LLC recovered on its cause of action. Once Golf Chic, LLC recovered on its cause of action, the
unresolved issue is the value of Debtor Beth Underhill’s membership interest in Golf Chic, LLC after
Golf Chic, LLC received the settlement.
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Debtor Beth Underhill’s interest in the settlement proceeds obtained by Golf Chic, LLC is
defined by state law. Pursuant to Ohio law, a person owning an interest in a limited liability
company is a member of that limited liability company. Ohio Rev. Code §1705.01(G). This
membership interest confers upon the member a right to a “share of the profits and losses of [the]
limited liability company and the right to receive distributions from that company.” Ohio Rev. Code
§1705.01(H). A person’s membership interest in a limited liability company is personal property.
Ohio Rev. Code §1705.17. “A ‘membership interest’ in a limited liability company, however, does
not confer upon the ‘member’ any specific interest in company property, whether personal property
or real property. Such property is, instead, held and owed [sic] solely by the company.” In re Liber,
No. 08-37046, 2012 WL 1835164, at *4 (Bankr. N.D. Ohio May 18, 2012). Therefore, if the
company is dissolved the assets of Golf Chic, LLC are retained for the benefit of creditors of the
company, not for the benefit of its members. Ohio Rev. Code § 1705.46. “Under this principle,
membership interests in the company only have value to the extent assets exceed the liabilities.” In
re Saunier, No. 11-60997, 2012 WL 5898601, at *1 (Bankr. N.D. Ohio Nov. 20, 2012); see also, In
re Hopkins, No. DG 10-13592, 2012 WL 423916 (Bankr. W.D. Mich. Feb. 2, 2012).
Under Ohio law, the settlement proceeds of the Hamilton County Action should have been
paid to Golf Chic, LLC. Debtor Beth Underhill, in her capacity as a member of Golf Chic, LLC was
required to pay creditors of Golf Chic, LLC before she made a distribution to herself on account of
her membership interest. Instead, the settlement proceeds were distributed directly to the attorney
who represented Golf Chic, LLC, in the amount of $35,015, and to Debtor Beth Underhill, in the
amount of $44,985, leaving Creditor Bank with no remedy but to reopen the Debtors’ bankruptcy
case to seek payment on their claim against Golf Chic, LLC.
If Debtor Beth Underhill had listed Golf Chic, LLC’s cause of action against the Hamilton
County Defendants on her bankruptcy schedules, the cause of action would have been litigated for
the benefit of the bankruptcy estate. Once the litigation was settled, Beth Underhill’s membership
interest would have been $80,000, less amounts owed to creditors of Golf Chic, LLC. The creditors
of Golf Chic, LLC (including the Blessing Law Firm) would have been paid, and the balance of the
settlement proceeds would belong to the Debtors’ bankruptcy estate for distribution to Debtors’
creditors.
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Now that this case is reopened, the bankruptcy court must determine what portion of the
settlement proceeds belongs to creditors of Golf Chic, LLC pursuant to Ohio law. Those proceeds
are recoverable by creditors of Golf Chic, LLC. Under Ohio law, Debtor Beth Underhill’s
membership interest has value to her bankruptcy estate, but only to the extent that the proceeds of
the settlement exceed creditor claims against Golf Chic, LLC. Therefore, the Panel is remanding this
matter back to the bankruptcy court so that the bankruptcy court can determine how the settlement
proceeds of the Hamilton County Action should have been distributed under Ohio state law.
CONCLUSION
For the foregoing reasons, the Panel AFFIRMS the bankruptcy court’s order granting
Creditor Bank’s motion to reopen the Debtors’ bankruptcy case. The Panel also REMANDS this
matter to the bankruptcy court for further findings as to what portion of the settlement proceeds
should have been paid to creditors of Golf Chic, LLC and what portion of the proceeds should be
paid into Debtor Beth Underhill’s bankruptcy estate on account of her membership interest in Golf
Chic, LLC.
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