Section 3.57 Postpetition Appreciation in Value

• Library: Bankruptcy Practice (2007 Ed. + 2015 Cum Supp)

C. (§3.57) Postpetition Appreciation in Value

Although after-acquired property is often excluded from property of the estate, the question occasionally arises as to who is entitled to postpetition appreciation in the value of property. When the entire asset is property of the estate, appreciation inures to the benefit of the estate. In In re Potter, 228 B.R. 422 (B.A.P. 8^th Cir. 1999), the court first held that a contingent interest in a trust was property of the estate. In rePotter, 228 B.R. at 424. Contrary to the debtor’s assertion that the estate’s interest was limited to the value of the trust as of the filing date, the court held that, under 11 U.S.C. § 541, the estate’s interest is in the entire asset, including any changes in value after the filing date. Id.

When the estate’s interest is in something less than the entire asset, the result can be different. In In re Wick, 276 F.3d 412 (8^th Cir. 2002), the court, in an issue of apparent first impression in the circuit, held that when the postpetition appreciation of...