You’ve likely seen the ads on TV urging you to hire a law firm to file a claim for exposure to toxic water if you lived or worked at Camp Lejeune between 1953 and 1987.
And if you’ve already gone through bankruptcy, you may not be required to reopen your case and schedule the claim, for reasons explained by Bankruptcy Judge Kevin R. Huennekens of Richmond, Va.
The debtor had been stationed at Camp Lejeune before 1987. He filed a chapter 7 petition in July 2022 and received a discharge in October 2022.
By 2009, there was a multidistrict litigation in federal court based on consumption of contaminated water at the Marine Corps base. The debtor did not schedule a claim based on the water at Camp Lejeune. (Had he done so, the trustee likely would have abandoned the claim, because the multidistrict lawsuits were dismissed in 2016.)
Then came Congress with the adoption of the Camp Lejeune Justice Act in August 2022. The Act entitled anyone who worked or was stationed at the base for more than 30 days between 1953 and 1987 to file suit in federal district court in North Carolina “for harm that was caused by exposure to the water at Camp Lejeune.”
You know what happens when a debtor fails to schedule a personal injury tort claim: The defendant moves to dismiss based on judicial estoppel. Or, the case reopens and the bankruptcy trustee ends up owning the claim, even though the debtor suffered the injury.
The debtor in the case before Judge Huennekens was laudably proactive. He filed a motion to reopen the case to schedule the claim. Judge Huennekens denied the motion on February 7, but denial was a victory for the debtor, believe it or not.
Here’s why it was a victory.
Judge Huennekens explained that a debtor may reopen a case under Section 350(b) to administer assets “to accord relief to the debtor, or for other cause.” Granting or denying the motion is addressed to the bankruptcy court’s discretion and will be denied if the debtor were entitled to no relief and reopening the case would be futile.
The debtor had been in chapter 7, but “property acquired by a debtor after the commencement of the bankruptcy case generally does not become property of the estate,” Judge Huennekens said, citing Harris v. Viegelahn, 575 U.S. 510, 513-14 (2015). He was tasked with deciding “whether the Debtor’s Claim for the prepetition injury he allegedly suffered at Camp Lejeune is property of the Debtors’ bankruptcy estate.”
Even though “the facts giving rise to the Debtor’s alleged Claim occurred prepetition,” Judge Huennekens held that “the Debtor had no right to payment of the Claim on the Petition Date” because “the right to assert that Claim . . . did not come into existence until August 10, 2022,” when Congress adopted the Act.
Therefore, the “date upon which the Debtor suffered the alleged injury is irrelevant,” Judge Heunnekens said, because the “Debtor did not have a claim within the meaning of the Bankruptcy Code until August 10, 2022.”
Judge Huennekens denied the motion to reopen because “the Debtor’s right to assert payment of the Claim arose postpetition, . . . belongs to the Debtor and is not property of the bankruptcy estate.”
You’ve likely seen the ads on TV urging you to hire a law firm to file a claim for exposure to toxic water if you lived or worked at Camp Lejeune between 1953 and 1987.
And if you’ve already gone through bankruptcy, you may not be required to reopen your case and schedule the claim, for reasons explained by Bankruptcy Judge Kevin R. Huennekens of Richmond, Va.
The debtor had been stationed at Camp Lejeune before 1987. He filed a chapter 7 petition in July 2022 and received a discharge in October 2022.
By 2009, there was a multidistrict litigation in federal court based on consumption of contaminated water at the Marine Corps base. The debtor did not schedule a claim based on the water at Camp Lejeune. (Had he done so, the trustee likely would have abandoned the claim, because the multidistrict lawsuits were dismissed in 2016.)
Then came Congress with the adoption of the Camp Lejeune Justice Act in August 2022. The Act entitled anyone who worked or was stationed at the base for more than 30 days between 1953 and 1987 to file suit in federal district court in North Carolina “for harm that was caused by exposure to the water at Camp Lejeune.”