Claim for Sale

Sale of a claim which has Adversary No. 14-4187: Timothy D. Moratzka vs. Richard T. Povlitzki and Bradley Povlitzki
Richard Povlitzki has a 1/7th beneficial interest in the Marlene A. Povlitzki Trust (“Povlitzki Trust”). Bradley Povlitzki is trustee of the Povlitzki Trust and also has a 1/7th beneficial interest in the Povlitzki Trust. There are five other beneficiaries. The value of a 1/7th interest is estimated to be a maximum gross value of $129,000 prior to taxes and attorney fees. The Povlitzki Trust was originally executed by Marlene Povlitzki on January 25, 2008 and was last amended April 6, 2011. The Settlor, Marlene Povlitzki, died on July 16, 2012. The Trust contains standard spendthrift trust provisions protecting beneficiaries that are uniformly enforced under Minn. law. Minimal distributions have been made from the Povlitzki Trust to the beneficiaries since July 16, 2012. There are no formal probate proceedings pending. Trustee alleges that under Minnesota Statute § 501B.03, the Povlitzki Trust terminated at the death of the Settlor and that at that time, a 1/7th interest vested in the Debtor free of any spendthrift constraint. The Trustee claims that this beneficial interest is an estate asset subject to administration by the bankruptcy estate. The Defendants dispute these assertions and claim the spendthrift provisions remain in full force and effect and that the estate has no beneficial interest in the Trust.