Section 6.5 Transfers and the Debtor as Fiduciary

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

2. (§6.5) Transfers and the Debtor as Fiduciary

Property that the debtor holds in trust for another is not property of the estate. Begier v. IRS, 496 U.S. 53, 58–59 (1990); United States v. Whiting Pools, Inc., 462 U.S. 198 (1983). As against the principal, property the debtor acquires by wrongful disposition of a principal’s property may be subject to a constructive trust. Reliance Ins. Co. v. Brown, 40 B.R. 214, 217 (W.D. Mo. 1984);
In re Stix & Co., 27 B.R. 252, 258–59 (Bankr. E.D. Mo. 1983) (Brauer, B.J.). But the existence of a right to seek the constructive trust remedy before the debtor...