UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF KENTUCKY
CORBIN DIVISION
IN RE:
EVERETT TRUMAN MAYS
BARBARA MAYS CASE NO. 86-60371
DEBTORS
OPINION AND ORDER
This matter came before the Court upon the Objection to Claim filed herein on May 22, 1996 by the United States Trustee in which the trustee objected to the claim of T.B. Grissom, Jr. in the amount of $742,531.30. That claim was filed on February 16, 1988, and the basis asserted for it was indemnity and contribution equal to one-half outstanding balance on notes on which Grissom and the debtor were jointly liable. After the trustee filed her objection, an Amended Proof of Claim was filed on behalf of Grissom on August 12, 1996 asserting liability in the amount of $24,253.67. That amount has subsequently been reduced and presently the sum of $22,013.83 is claimed on behalf of Grissom. The asserted claim is made under
'502(e) of the Bankruptcy Code as one for reimbursement or contribution. Attached to the Amended Proof of Claim herein is correspondence from the Chairman of the Board of the Bank of Mount Vernon establishing that Grissom paid $44,027.68 on joint liabilities. Apparently, these were all of the payments made on the note. Half of this amount is $22,013.84 which is the amount now claimed due by Grissom. While Grissom previously asserted payments on a note to First and Farmers Bank of Somerset in the amount of $4,479.67 as an additional source of a claim for contribution, it appears that there is no proof before the Court which party made other payments on that indebtedness and the Court cannot conclude that Grissom would have a claim for contribution where the source of those other payments is not made clear.To further complicate the picture, Grissom filed bankruptcy on June 6, 1991 and a Final Decree was entered in that case on June 25, 1992, and there was no distribution of assets to creditors. Grissom did not list the claim filed in this proceeding as an asset in his own bankruptcy. Clearly, this pending claim in this proceeding was a legal or equitable interest of Grissom in property at the time of his filing and therefore it passed to the trustee as property of the estate pursuant to 11 U.S.C.
'541(a). Since no exemption of such property was asserted, or apparently available, the property remains property of the estate pursuant to 11 U.S.C. '554(d) even though the estate has been closed.The trustee has further argued that the claim involved herein, above determined to be that of the bankruptcy estate of Grissom, should be subordinated in this proceeding because of the alleged inequitable conduct of Grissom in failing to list the claim as an asset in this proceeding. There is no proof in the record to show that at the time the schedules were filed, the failure to list the claim was anything more than an oversight and the Court cannot conclude, even though Grissom has attempted to prosecute the claim here, that the conduct is necessarily inequitable. This is particularly true in light of the fact that the Court has found the claim to be the property of Grissom's bankruptcy estate and thus would be distributed to many of the same creditors with claims in the Mays' estate, and, in particular, the creditors holding joint obligations of Grissom and Mays.
Based upon the foregoing, it is hereby ordered that the objection is SUSTAINED as to the aforesaid claim, except to the extent of $22,013.84, which such amount is allowed and that the claim is the property of the estate in bankruptcy of the claimant, Thomas Baker Grissom, Jr.
Dated this _____ day of October, 1996.
BY THE COURT
______________________________
JUDGE
COPIES TO:
Debtors
Joseph M. Scott, Esq.
W. Thomas Bunch, Esq.
John P. Brice, Esq.
Joseph J. Golden, Esq.
John T. Hamilton, Esq.
Bank of Mount Vernon