9th Circ. Rejects Textualist Approach To Bankruptcy Code

By Steve Werth (May 30, 2018, 1:43 PM EDT) -- In a May 7, 2018, decision in Lee v. Field (In re Lee),[1] the U.S. Court of Appeals for the Ninth Circuit eliminated what otherwise would be a trap for the unwary trustee or creditor who commences litigation to eliminate the basis for a debtor to assert an exemption in property: the risk that such litigation will be mooted because the party failed to satisfy Federal Rule of Bankruptcy Procedure 4003(b)(1). Rule 4003(b)(1) states that a party in interest must object to a claimed exemption in property within 30 days of the debtor's meeting of creditors. The Ninth Circuit, in Lee, held that filing a complaint against the debtor in that time period will satisfy that requirement, even if that complaint does not specifically object to the exemption, when the complaint attacks the basis for asserting that exemption....

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