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A CLAIM WHICH ARISES AFTER THE FILING OF A BANKRUPTCY PETITION BELONGS TO THE DEBTOR, NOT TO THE BANKRUPCTY ESTATE (FIRST DEPT).

The First Department, noting its prior rulings to the contrary, determined a claim which arises after the filing of a bankruptcy petition belongs to the debtor, not the bankruptcy estate:

This Court has previously held that a claim which arose after the filing of a bankruptcy petition was the property of the estate (see Barranco v Cabrini Med. Ctr., 50 AD3d 281, 282 [1st Dept 2008]; Williams v Stein, 6 AD3d 197, 198 [1st Dept 2004]). When those cases were decided, there was a split among the federal courts which had addressed the issue. However, there is now uniformity among the Federal Courts of Appeals, which have held that pursuant to section 541(a) of the Bankruptcy Code, a claim which arose after the filing of a bankruptcy petition belongs to the debtor and not the estate … . As this Court is bound by federal law when making a determination on this issue … we follow the … federal holdings and find that because the claims at issue arose after the filing of the bankruptcy petition, the claims belong to Realty [plaintiff]. Thus, Realty has the capacity to sue [defendants]. Moncho v Miller, 2021 NY Slip Op 06960, First Dept 12-14-21

 

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