Case Summary:
The Chapter 13 Debtor alleged that Talmer Bank & Trust willfully violated the automatic stay by refusing to return equipment it repossessed prepetition. The Bank had exercised its rights under a security agreement and repossessed the Debtor’s equipment pursuant to a default judgment and writ of replevin. The Bankruptcy Court held that the Bank violated 11 U.S.C. § 362(a)(3) by exercising control over property of the bankruptcy estate. The equipment had not yet been sold or transferred, and no evidence of a contract for disposition was presented. Therefore, under Wis. Stat. § 409.623(3) and Wis. Stat. § 409.617(a), the Debtor retained rights in the equipment even after the bank repossessed it. Further, the judgment of replevin did not extinguish the Debtor’s legal and equitable interests in the equipment. Therefore, it remained property of the Estate and subject to the automatic stay. Finding the violation to be willful, the Court held the Bank in contempt until it returned the equipment.
Statute/Rule References:
11 U.S.C. § 362(a)(3)
11 U.S.C. § 362(k)(1)
Wis. Stat. § 409.617(a)
Wis. Stat. § 409.623(3)
Key Terms:
Property of the Estate
Willful Violation
Automatic Stay
Collateral
Replevin