Date of Decision:
May 16, 2008
The case trustee asked the Court to determine the interests of several parties in settlement funds the bankruptcy estate received post-petition arising from one debtor's pre-petition car accident.
The Court concluded, in separate decisions: (1) the debtor's health insurance provider held a subrogated interest in the settlement funds to the extent of benefits paid related to the accident, both pre- and post-petition, and subrogated funds were excluded from the bankruptcy estate; (2) a post-petition medical care provider, a hospital, did not have any interest in the settlement funds or the debtor's insurance benefits based on post-petition hospital liens or admission consent forms signed by the debtor; and (3) the debtors' interest in the settlement funds was limited to the amount they had claimed exempt under S.D.C.L. § 43-45-4.
Full Bankruptcy Court Decision: