{"ID":55691,"name":"Schwab v. Reilly","href":"https:\/\/api.oyez.org\/cases\/2009\/08-538","view_count":0,"docket_number":"08-538","additional_docket_numbers":null,"manner_of_jurisdiction":"Writ of \u003Ci\u003Ecertiorari\u003C\/i\u003E","first_party":"William G. Schwab","second_party":"Nadejda Reilly","timeline":[{"event":"Granted","dates":[1240808400],"href":"https:\/\/api.oyez.org\/case_timeline\/case_timeline\/40508"},{"event":"Argued","dates":[1257228000],"href":"https:\/\/api.oyez.org\/case_timeline\/case_timeline\/40509"},{"event":"Decided","dates":[1276750800],"href":"https:\/\/api.oyez.org\/case_timeline\/case_timeline\/40510"}],"lower_court":{"ID":8,"name":"United States Court of Appeals for the Third Circuit","href":"https:\/\/api.oyez.org\/taxonomy\/term\/8"},"facts_of_the_case":"\u003Cp\u003EIn April 2005, Nadejda Reilly filed Chapter 7 bankruptcy. Pursuant to standard practice, she listed equipment related to her catering business as \u0022exempt\u0022 from the bankruptcy proceedings and valued the equipment at over $10,000. Trustee William Schwab independently had Ms. Reilly\u0027s business equipment appraised at over $17,000. He then sought a motion for the Bankruptcy Court to sell Ms. Reilly\u0027s equipment and turn over the proceeds, less the value of her exemption. Ms. Reilly countered that the business equipment had become fully exempt when Mr. Schwab failed to timely object when she listed the equipment as exempt. The Bankruptcy Court agreed and denied Mr. Schwab\u0027s motion to sell off Ms. Reilly\u0027s equipment. A federal district court in Pennsylvania affirmed the Bankruptcy Court. On appeal to the U.S. Court of Appeals for the Third Circuit, the court affirmed, holding that Mr. Schwab\u0027s failure to file a timely objection to Ms. Reilly\u0027s exemption barred him from moving to sell the property.\u003C\/p\u003E\n","question":"\u003Cp\u003E1) When a debtor claims an item \u0022exempt\u0022 from bankruptcy proceedings, must an interested party object to the claimed exemption in order to preserve their right to claim any value in the item exceeding the value listed as exempt?\u003C\/p\u003E\n\u003Cp\u003E2) Does a creditor who wishes to sell a debtor\u0027s \u0022exempted\u0022 item need to timely object to its exempt status in order to move for its sale, even if its real value exceeds the value claimed by the debtor?\u003C\/p\u003E\n","conclusion":"\u003Cp\u003ENo. No. The Supreme Court held that a creditor is not required to object to a debtor\u0027s exemptions in order to preserve his right to claim any value in the item exceeding the value listed as exempt. With Justice Clarence Thomas writing for the majority, the Court reasoned that the bankruptcy code only requires a timely objection to an asset\u0027s categorization as exempt and does not apply to objections about the asset\u0027s value.\u003C\/p\u003E\n\u003Cp\u003EJustice Ruth Bader Ginsburg, joined by Chief Justice John G. Roberts and Justice Stephen G. Breyer, dissented. She argued that the failure to object to the debtor\u0027s valuation of an exempt asset should prevent the creditor\u0027s later challenge to the valuation because the asset\u0027s valuation is critical in determining whether the debtor will be allowed to keep the property.\u003C\/p\u003E\n","advocates":[{"advocate":{"ID":33557,"name":"Jeffrey B. 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