In re Prochnow, 467 B.R. 656 (C.D. Ill. 2012)

(Chapter 7 debtor (real estate agent) moved to hold former employer in contempt for violating automatic stay provision by withholding sales commissions earned pre-petition but due post-petition; debt incurred as result of agency pre-paying bills for which debtor was responsible; agency applied commissions owed to debt; bankruptcy court held commission earned pre-petition was part of bankruptcy estate and failing to disclose interest in schedules meant debtor was judicially estopped from claiming interest at later date and debtor lacked standing because entitlement to commissions became property of estate; debtor appealed these two issues; appellate court affirmed on both issues; court held commission was property of estate because right to commission vested post-petition, payment was made for services rendered pre-petition, so interest in commission required to be disclosed; court also agreed agency was entitled to commission pursuant to doctrine of recoupment, which permits the offset of debts when obligations are based on same transaction or occurrence; court found historical practice of applying commissions to outstanding expenses prepaid to enable commissions to be earned, so doctrine applied).

CALT does not provide legal advice. Any information provided on this website is not intended to be a substitute for legal services from a competent professional. CALT's work is supported by fee-based seminars and generous private gifts. Any opinions, findings, conclusions or recommendations expressed in the material contained on this website do not necessarily reflect the views of Iowa State University.

RSS​ Facebook Twitter