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Pursuant to Section 541(a) of Title 11 of the U.S. Code (the Bankruptcy Code), the filing of a bankruptcy petition creates an estate composed of "all legal or equitable interests of the debtor in property as of the commencement of the case." The term "property of the estate" has been broadly construed to include tangible or intangible property in which the debtor has an interest at the time it seeks bankruptcy protection. (See, e.g., In re Kane, 628 F.3d 631, 637 (3d Cir. 2010).) On May 21, the U.S. Court of Appeals for the Third Circuit in Majestic Star Casino LLC v. Barden Development (In re Majestic Star Casino LLC), Case Nos. 12-3200 and 12-3201 (3d Cir. 2013), determined that the broad scope of § 541(a) did not include a debtor corporation's status as an S corporation under the Internal Revenue Code. Though a matter of first impression before the circuit court, the decision marks a departure from a line of lower and appellate court decisions that have held a debtor's tax status to be property of the debtor's bankruptcy estate. (See, e.g., In re Trans-Lines West, 203 B.R. 653 (Bankr. E.D. Tenn. 1996).)

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