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By: Craig Kavanagh

St. John's Law Student

American Bankruptcy Institute Law Review Staff

Recently, the New Jersey Bankruptcy Court, in In re Bursztyn,

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held that Fourth Amendment limitations applied to a trustee’s conduct in seeking to search a debtor’s residence with the intention of seizing undisclosed assets.  However, the Court reasoned that, by filing bankruptcy, the debtor had reduced her reasonable expectations of privacy

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and the Court held that the trustee’s actions did not exceed the Fourth Amendment standards of reasonableness.

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In Bursztyn, based on an investigation of court records of the debtor's recent divorce, the trustee suspected that the debtor was hiding valuable jewelry and artwork that was not listed in the debtor’s bankruptcy petition or financial affairs statements.

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The trustee requested from the Court, ex parte, an order allowing her to search the debtor’s home with the hopes of obtaining the art and jewelry that now belonged to the estate.

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The Court granted authorization, and the United States Marshals Service and the trustee served the order upon the debtor at her residence, and proceeded to search her bedroom and closets.

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The search uncovered nearly two hundred pieces of fine jewelry and ten works of art, valued at nearly $250,000.

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Claiming that the search and seizure violated her Fourth Amendment rights, the debtor sought to suppress all evidence uncovered by the trustee’s search.

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By: Jonathan Grasso

St. John's Law Student

American Bankruptcy Institute Law Review Staff

In Walden v. Walker (In re Walker),

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the Eleventh Circuit Court of Appeals held that the bankruptcy court has the power to remove a trustee sua sponte.  In Walker, the elected Chapter 7 trustee filed a verified statement claiming she had no significant connection with any party of interest and testified that she had no relationship with the second largest creditor.

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 The debtor moved for removal and the trustee responded by asserting that a debtor in an insolvent estate had no pecuniary interest and thus was not a party in interest and lacked standing to challenge the trustee’s appointment.

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  The court found that she had lied under oath concerning her relationship with the creditor and removed her as trustee.

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  On appeal, the Eleventh Circuit held that bankruptcy judges possess the power to remove a trustee for lying under oath, sua sponte, after notice and a hearing.

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