A debtor claimed that she was entitled to an exemption for the value of her rent-stabilized lease. A bankruptcy Chapter 7 trustee moved to strike such claim.
A rent-stabilized lease is “property of the estate and…the Trustee may ‘assume or reject any executory contract or unexpired lease of the debtor.’” The subject issue, which was “apparently one of first impressionis whether the value of Debtor’s rent-stabilized lease…is exempt as a ‘public assistance benefit’ within the meaning of section 282(2) of the New York Debtor and Creditor Law (DCL).” The court found that the lease “does not qualify as an exempt ‘public assistance benefit’” and sustained the Trustee’s application. The debtor had filed a petition for relief under Chapter 7 of the Bankruptcy Code. The debtor’s filed schedules “listed the Lease as an executory contract and unexpired lease….” “After filing a no-asset report, the Trustee received an offer from the Debtor’s landlord…, to purchase the Trustee’s right, title and interest in the Lease. The Trustee then withdrew the no-asset report” and the court had extended the trustee’s time to assume or reject the estate’s rights in the lease.
