What is the effect of a bankruptcy trustee's abandonment of a property in a personal injury case?

California, United States of America


The following excerpt is from Flaherty v. Bank of Am., N.A., B261594 (Cal. App. 2017):

"After notice and a hearing, the [bankruptcy] trustee may abandon any property of the estate that is burdensome to the estate or that is of inconsequential value and benefit to the estate." (11 U.S.C. 554(a).) "Unless the court orders otherwise, any property 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(d).) "[A]bsent abandonment of the claim by the trustee, a debtor out of possession has no standing to prosecute a cause of action which has passed to the bankruptcy estate." (Bostanian v. Liberty Savings Bank (1999) 52 Cal.App.4th 1075, 1081.)

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