Bucy v. Evans (In Re Evans)

MEMORANDUM

KEITH M. LUNDIN, Bankruptcy Judge.

The question presented is whether the Chapter 7 trustee can use the “strong arm” power in § 544(a)(2) to penetrate a spendthrift trust where Tennessee law would permit the State of Tennessee as a (hypothetical) unsatisfied creditor to reach assets of the trust. The trustee cannot use § 544(a)(2) to assert the special status of the State.

This is a core proceeding. 28 U.S.C. § 157(b)(2)(A), (O). The following are findings of fact and conclusions of law. Bankr.R. 7052.

I

In 1953, the debtor’s father and uncle settled the “Clarendon Properties Trust,”…