Bankruptcy

Auctioning a Debtor's Dreams, Hopes, and Beanie Babies in Bankruptcy Cases

By Joseph McDaniel, Esq.

The trustees have slightly different ways of approaching the sales.

The physical plant for the sales is Room 102 at the District of Arizona Bankruptcy Court, and it's an ordinary room with a phone in the middle of a folding table. There are perhaps fifty chairs in the room.

The trustees differ in their approaches in many ways, but not in one: they don't take cash. Normally it'll be a cashier's check within three days of the sale.

There is normally a lowball bid first made by the debtor.

There are people present on the telephone, often including the debtor, and the folks on the phone, and the folks in Room 102, can bid.

The increments of price differ a bit depending on the trustee and the value of the asset being disposed of at the sale. The increments might be $1,000 for real property (20 acres in Casa Grande, for instance), or $10, for the exercise bike.

The assets being sold are broken out individually by some of the trustees, so that trustee might show a sale of five different cars, all with different initial bids made by the debtor.

Another trustee might have a sale of "one pool table, three guns, two exercise bikes, and a pearl necklace and earrings" all lumped together, with a starting bid of $500.

Yet another trustee will list the items for sale with great particularity, showing a Glock 9mm pistol with case and two 16 round magazines and two 50 round boxes of ammunition with a starting bid of $100 (note: the Glock, sight unseen, was bid up to $300; nobody wanted the 22 pistol, which was bought back by the debtor for $100. The 22 pistol was therefore "Sold As Bid", which happened about half the time.

The debtor, especially with wedding rings and cars, had the privilege of bidding in the exemption to which the debtor was entitled.

Note: I didn't notice any particular bargains for anybody.

Also note: auction fever caused some items to go for more than a careful buyer might have paid.

NOTHING HERE CONSTITUTES LEGAL ADVICE RE A CHAPTER 7, CHAPTER 13, CHAPTER 11, OR CHAPTER 12. FIND AN ARIZONA BANKRUPTCY LAWYER WHO IS BOARD CERTIFIED IN BANKRUPTCY LAW, AV RATED, AVVO 10 RATED, ON SUPERLAWYERS, OR JUST VERY EXPERIENCED AND A FORMER CHAIR OF SOME BANKRUPTCY SECTION OR COMMITTEE. NOTHING HERE MAY BE USED AS LEGAL ADVICE IN CONNECTION WITH ANY BANKRUPTCY, WHETHER THAT BANKRUPTCY IS IN PHOENIX, GLENDALE, TEMPE, MESA, SCOTTSDALE, OR ANYWHERE ELSE.

Full post as published by Arizona Bankruptcy Attorney Blog on January 29, 2010 (boomark / email).