Donarumo v. Furlong (In Re Furlong)

United States Court of Appeals
For the First Circuit

Nos. 11-1364, 11-1386

IN RE: MICHAEL FURLONG; JOANN FURLONG,

Debtors.

ANDREW C. DONARUMO; MURRAY SUPPLY CORPORATION,

Appellants, Cross-Appellees,

v.

MICHAEL FURLONG; JOANN FURLONG,

Appellees, Cross-Appellants.

APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Patti B. Saris, U.S. District Judge]

Before

Lynch, Chief Judge,
Boudin and Stahl, Circuit Judges.

Anthony L. Gray, with whom Natalie A. Heineman, Jeffrey J.
Phillips, Daniel Treger, Pollack & Flanders, LLP, and Phillips &
Angley were on brief, for appellants, cross-appellees.
Jeffrey B. Renton, with whom Michael B. Feinman, Matthew J.
Ginsburg, Gilbert & Renton LLC, and Feinman Law Offices were on
brief, for appellees, cross-appellants.

November 1, 2011
 STAHL, Circuit Judge. On December 19, 2006, after the

failure of their business, Drew's Plumbing & Heating II (Drew's

II), Michael and JoAnn Furlong (the Furlongs) filed petitions under

Chapter 7 for personal and corporate bankruptcy. During the

pendency of the proceedings before the bankruptcy court, the

Furlongs filed a Motion to Verify or Compel Abandonment of Certain

Property of the Estate (Motion to Verify), which was opposed by

Andrew Donarumo (Donarumo) and Murray Supply Corp. (Murray Supply).

The bankruptcy court ruled on the motion on September 28, 2010,

finding that claims against Donarumo had been properly abandoned

from both estates but that the stock of Drew's II remained property

of the personal bankruptcy estate. In re Furlong (Furlong I), 437

B.R. 712, 721 (Bankr. D. Mass. 2010). Donarumo and Murray Supply

appealed the abandonment ruling, while the Furlongs cross-appealed

the ruling regarding the stock. The district court affirmed the

bankruptcy court on April 1, 2011, In re Furlong (Furlong II), 450

B.R. 263, 271 (D. Mass. 2011), and this timely appeal followed,

with the parties maintaining their positions from below. We

affirm.

I. Facts & Background

On January 14, 2005, the Furlongs purchased the assets of

Drew's Plumbing & Heating, Inc. (Drew's I) from Andrew Donarumo

for $1 million, $800,000 of which was in cash and $200,000 of which

was in the form of a promissory note secured by mortgages on the

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Furlongs' real property. With the purchased assets, the Furlongs

formed Drew's II, but the business failed by June 5, 2006. The

Furlongs claim that Drew's II failed because Donarumo engaged in

fraud with respect to the original sale and competed with Drew's II

after the sale, including poaching its customers. Donarumo

contests these allegations.

On December 19, 2006, the Furlongs filed Chapter 7

bankruptcy petitions for themselves personally and for the

corporate bankruptcy of Drew's II. John A. Burdick, Jr. (Trustee)

was appointed to serve as trustee for both cases. In both

bankruptcies, the Furlongs listed on the "Schedule B-Personal

Property" (Schedule B) "Claims for Breach of Contract (Andrew

Donarumo et al.)," with "Indeterminate" value. On the Schedule B

for the personal bankruptcy, the Furlongs listed "Drew's Plumbing

& Heating II, Inc. - 100% Interest," with "Unknown" value.

At a creditors' meeting held pursuant to 11 U.S.C. § 341

on January 17, 2007, Mr. Furlong discussed with the Trustee and

present creditors the claims against Donarumo. Though the schedule

only listed claims for breach of contract, at the § 341 meeting,

Mr. Furlong described related claims stemming from Donarumo's sale

of Drew's II that the Furlongs intended to bring on their own

behalf and on behalf of Drew's II, including claims sounding in

tort. After the creditors' meeting and before the Trustee took any

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action on the claims, Donarumo consulted his attorney as to how he

should respond to the Furlongs' claims.1

Following the creditors' meeting, the Furlongs exchanged

letters and emails with the Trustee regarding the claims and also

sent him a sixteen-count draft complaint. The complaint laid out

claims for breach of contract, but also claims for deceit,

misrepresentation, breach of the implied covenant of good faith and

fair dealing, negligence, breach of fiduciary duty, intentional

interference with advantageous business or contractual

relationships, intentional and negligent infliction of emotional

distress, and for violations under the Massachusetts Consumer

Protection Act, Mass. Gen. Laws ch. 93A. The Trustee, using the

draft complaint, attempted to retain an attorney to pursue the case

on a contingency basis but was unable to do so on terms he found

acceptable.

With the statute of limitations on the state claims

running, the Furlongs asked the Trustee to abandon the claims. At

the same time, the Trustee was seeking to establish that $5,000

that the Furlongs held in a bank account was not exempt from the

personal bankruptcy. The Furlongs agreed to turn over the $5,000

1
The record is not entirely clear, but a reasonable inference
may be drawn from Donarumo's malpractice complaint against his
attorney that he learned about the Furlongs' claims against him at
the § 341 creditors' meeting and therefore had actual notice of the
extent of the claims, which caused him to consult counsel after the
meeting.

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to the Trustee, while the Trustee agreed to abandon all claims

against Donarumo.

On October 26 2007, in the corporate bankruptcy, the

Trustee filed a "No Asset and No Distribution Report," and on

December 28, 2007, the corporate bankruptcy estate was closed.

Accordingly, any scheduled assets that had not been administered,

including all properly-scheduled claims, were abandoned by

operation of law under 11 U.S.C. § 554(c) as of the closing of the

corporate bankruptcy estate.

The Trustee filed a "Notice of Intention to Abandon"

(Notice) in the personal bankruptcy on November 6, 2007, in which

the Trustee stated his intent to abandon "a cause of action against

Andrew Donarumo, et al." In the "Reason for Abandonment" section,

the Trustee explained his failure to find an attorney who would

prosecute the claims on acceptable terms, and stated that, in his

business judgment, "pursuing this litigation would not be cost

effective for the estate." Also in the "Reason for Abandonment"

section, the Trustee characterized the claims as "based upon the

Debtors' allegation that certain misrepresentation and other

business related tort cause [sic] of action arose from the purchase

of a business known as Drew's Plumbing and Heating, Inc. II." No

objections to the Notice were filed, and the bankruptcy court

approved the abandonment on November 30, 2007.

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 On January 10, 2008, the Furlongs and Drew's II filed

suit against Donarumo and others in Suffolk Superior Court in

Boston, Massachusetts, alleging claims similar to those outlined in

the draft complaint that the Furlongs had shown to the Trustee, all

of which related to the sale of the assets to Drew's II.

Prior to the filing of the bankruptcy petitions, Drew's

II had surrendered its business assets, including both tangible

assets and "general intangibles" (and therefore possibly some or

all of its claims against Donarumo) to its secured lender, Key

Bank. Key Bank then sold the tangible and intangible assets to Gem

Plumbing. On February 13, 2010, Gem Plumbing assigned back to the

Furlongs and Drew's II whatever rights it held in any claims

against Donarumo or his business entities. On February 27, 2010,

the Furlongs, at a meeting of the directors of Drew's II at which

they were the sole attendees, assigned to themselves these rights.

The Trustee was not invited to the meeting, of which he was

unaware, nor was he asked to approve the assignment.

On December 9, 2009, the Trustee filed his Final Report

and Account Before Distribution in the personal bankruptcy, but he

subsequently moved to withdraw the report before any hearing could

take place, citing Donarumo's January 26, 2010 offer to purchase

from the personal bankruptcy estate both the claims against him and

the Furlongs' stock in Drew's II for a total of $5,000. The

bankruptcy court granted the motion to withdraw, and the Furlongs

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responded on March 12, 2010 by filing the Motion to Verify.

Donarumo filed an opposition and cross-motion, and Murray Supply,

a creditor, joined the cross-motion, adopting all of Donarumo's

positions.

The bankruptcy court issued its memorandum of decision on

September 28, 2010, ruling that the Trustee had abandoned all

claims in the corporate bankruptcy case by operation of law under

§ 554(c), as well as all claims in the personal bankruptcy case via

the Notice under § 554(a). Furlong I, 437 B.R. at 719-21.

However, the bankruptcy court also ruled that the Drew's II stock

had never been abandoned and remained the property of the personal

bankruptcy estate, possibly entitling the personal bankruptcy

estate to proceeds from any damages awarded to Drew's II.2 Id. at

721. Donarumo appealed the first ruling, and the Furlongs cross-

appealed the second. On April 1, 2011, the district court issued

its memorandum and order, affirming the rulings of the bankruptcy

court. Furlong II, 450 B.R. at 271. This timely appeal followed,

2
While the appeal was pending before the district court, the
Trustee and the Furlongs entered a proposed agreement whereby the
Trustee would permit the Furlongs to represent the bankruptcy
estate's potential interest in the state court claims against
Donarumo, and any recovery to either the Furlongs or Drew's II
would be shared, with 10% going to the Trustee and 90% to the
Furlongs. The Trustee and the Furlongs moved for the bankruptcy
court to approve this agreement on February 17, 2011, but while the
motion was pending, the district court issued its decision and
Donarumo filed a notice of appeal. Given the appeal, the
bankruptcy court determined that it was stripped of jurisdiction to
consider the motion and continued its decision until this Court had
concluded its proceedings.

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in which Donarumo and Murray Supply again appeal the ruling on the

abandonments, and the Furlongs again cross-appeal the ruling on the

Drew's II stock.

II. Discussion

A. Standing

Though none of the parties raised the issue of standing

before the district court, the Furlongs here argue that neither

Donarumo nor Murray Supply has standing to appeal the ruling on the

abandonments, while Donarumo and Murray Supply challenge the

Furlongs' standing to cross-appeal the stock issue. Where the

issue of standing was not raised below, this Court must undertake

the inquiry without remanding. Spenlinhauer v. O'Donnell, 261 F.3d

113, 118 (1st Cir. 2001). Standing to appeal a bankruptcy order is

limited to "persons aggrieved," that is, persons whose pecuniary

interests are adversely affected by the challenged order. Id. at

117-18. All parties here meet the "persons aggrieved" standard and

therefore have standing to appeal the various parts of the

bankruptcy court's order.3

3
The bankruptcy court found that Donarumo, as a scheduled
creditor in both bankruptcies, had standing to oppose the Motion to
Verify. Furlong I, 437 B.R. at 717 n.5. This Court reviews
factual determinations by a lower court of whether a party has
standing for clear error, Spenlinhauer, 261 F.3d at 118; there was
no error in this determination.

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B. The Corporate Bankruptcy Abandonment

Donarumo and Murray Supply appeal the lower courts'

determinations that claims against Donarumo held by the corporate

bankruptcy estate were effectively abandoned by operation of law

under 11 U.S.C. § 554(c). "On appeal from a district court

decision reviewing a bankruptcy court order, we review the

bankruptcy court order directly, disturbing its factual findings

only if clearly erroneous, while according de novo review to its

conclusions of law." Spenlinhauer, 261 F.3d at 117.

"[A]ll legal or equitable interests of the debtor in

property" as of the commencement of bankruptcy, including causes of

action, become property of the bankruptcy estate. 11 U.S.C. §

541(a)(1); DiMaio Family Pizza & Luncheonette, Inc. v. The Charter

Oak Fire Ins. Co., 448 F.3d 460, 463 (1st Cir. 2006). So long as

the claims remain in the bankruptcy estate, "the trustee 'steps

into the shoes of the debtor for the purposes of asserting or

maintaining the debtor's causes of action[].'" DiMaio, 448 F.3d at

463 (quoting In re Rare Coin Galleries, Inc., 862 F.2d 896, 901

(1st Cir. 1988)).

However, like any other property, claims that are

disclosed by the debtor to the bankruptcy court may be abandoned by

the trustee to the debtor. A debtor has a duty to disclose all

assets to the bankruptcy court on a schedule, including legal

claims. 11 U.S.C. § 521(a)(1); Graupner v. Town of Brookfield, 450

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F. Supp. 2d 119, 124 (D. Mass. 2006). If an asset has been

formally scheduled under § 521(a)(1) but has not been administered

by the trustee when the estate is closed, the asset is abandoned to

the debtor by operation of law. 11 U.S.C. § 554(c).4 However,

property that is neither administered nor abandoned (including

property not properly scheduled that was never administered)

remains property of the estate. 11 U.S.C. § 554(d).

In this case, any of Drew's II's claims that were

properly scheduled under § 521(a)(1) were abandoned by operation of

law under § 554(c), but those claims that were not properly

scheduled remain property of the estate under § 554(d). This would

be an easy issue to decide if the Furlongs had listed every theory

of recovery they intended to pursue against Donarumo, or had more

broadly described their cause of action as claims arising from the

sale of Drew's I, instead of scheduling "Claims for Breach of

Contract (Andrew Donarumo et al.)." However, those are not the

facts we have, and we are left with the task of addressing what

level of detail is required for proper scheduling.

While a legal claim that is totally unscheduled may not

be abandoned by operation of law under § 554(c), Jeffrey v.

Desmond, 70 F.3d 183, 186 (1st Cir. 1995), a partially-scheduled

4
Property may also be abandoned after notice and hearing
under § 554(a), which is the manner in which the Trustee abandoned
the claims in the personal bankruptcy estate here, or by court
order under § 554(b).

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claim requires a more careful inquiry into whether the requirements

of § 521(a)(1) were met.

Once an asset is referenced on a schedule, § 521(a)(1)

does not specify the level of detail with which that asset must be

described. See Furlong I, 437 B.R. at 718 (quoting Kuehn v. Cadle

Co., No. 5:04-cv-432-Oc-10GRJ, 2007 WL 809656, at *4 (M.D. Fla.

March 15, 2007)) ("The statute does not provide any guidance as to

the level of specificity required" when listing assets on a

bankruptcy schedule.) (alteration omitted); see also In re Mohring,

142 B.R. 389, 395 (Bankr. E.D. Ca. 1992) ("There are . . . no

bright-line rules for how much itemization and specificity is

required" on a bankruptcy schedule.), aff'd, 153 B.R. 601 (B.A.P.

9th Cir. 1993), aff'd, 24 F.3d 247 (9th Cir. 1994).

While a "debtor has a duty to prepare schedules

carefully, completely, and accurately," generally, an asset is

adequately scheduled if its description exhibits "reasonable

particularization under the circumstances." In re Mohring, 142

B.R. at 394-95; see also Payne v. Wood, 775 F.2d 202, 205 (7th Cir.

1985)("It would be silly to require a debtor to itemize every dish

and fork . . . ."). As "investigation is part of the Trustee's

duties under § 704," see In re Bonner, 330 B.R. 880, at *5 (B.A.P.

6th Cir. 2005); 11 U.S.C. § 704(a)(4), a debtor is required only to

"do enough itemizing to enable the trustee to determine whether to

investigate further," Payne, 775 F.2d at 207.

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 Here, the Trustee was not only on inquiry notice as to

the extent of the asset, he was on actual notice.5 The Trustee was

able to conduct his investigation into the value of the claims with

the help of the sixteen-count draft complaint before determining

that it would not be cost-effective to pursue the claims.

Further, the Bankruptcy Code does not require every

component of a cause of action to be spelled out on a debtor's

schedule. See Bonner, 330 B.R. 880, at *4 (where debtors scheduled

"Auto Accident Claim," it was common knowledge that a personal

injury suit could arise out of the same underlying facts, and the

trustee was on notice to investigate, satisfying the requirements

of § 521); cf. Tilley v. Anixter, Inc., 332 B.R. 501, 510-11 (D.

Conn. 2005) (reasoning that the scheduling of one claim does not

amount to the proper scheduling of another if the first claim does

not put the trustee on inquiry notice to investigate the second).

Here, the Furlongs described their claims with reasonable

particularity and it is common knowledge that business tort claims

and claims under Mass. Gen. Laws ch. 93A might arise out of the

same underlying facts as a claim for breach of contract;6

5
Additionally, creditors attending the § 341 creditors'
meeting were on actual notice of the claims after they were
described by Mr. Furlong in greater detail than on the Schedule B.
6
We do not address the claims for negligent and intentional
infliction of emotional distress in the context of the corporate
bankruptcy, as those claims appear to be brought by the Furlongs in
their individual capacities.

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therefore, the Trustee was on inquiry notice to investigate the

extent of the asset. Moreover, the Trustee, having actual

knowledge of the contents of the draft complaint, was able to

complete his investigation into the value of the claims before

making the decision to abandon the claims from the estate.

Therefore, all of Drew's II's claims against Donarumo were properly

scheduled under § 521(a)(1) and were abandoned by operation of law

under § 554(c) when the corporate bankruptcy case was closed.

C. The Personal Bankruptcy Abandonment

Donarumo and Murray Supply challenge the lower courts'

determinations that the state court claims held by the personal

bankruptcy estate that were not specifically named in the Notice of

Intention to Abandon were in fact abandoned under 11 U.S.C. §

554(a). We review the bankruptcy court's findings of fact for

clear error and its conclusions of law de novo. Spenlinhauer, 261

F.3d at 117.

Section 554(a) provides that "[a]fter notice and a

hearing, the trustee may abandon any property of the estate that is

burdensome to the estate or that is of inconsequential value and

benefit to the estate." 11 U.S.C. § 554(a). However, a hearing is

unnecessary if no party in interest requests one. Id. § 102(1).

In this case, the Trustee filed a Notice of Intention to Abandon in

the personal bankruptcy case on November 6, 2007. No parties in

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interest objected or requested a hearing, and the bankruptcy court

approved the Notice on November 30, 2007.

Donarumo and Murray Supply argue that only the claims

specifically named in the "Reasons for Abandonment" section of the

Notice were abandoned under § 554(a). It is true that "a trustee's

intent to abandon an asset must be clear and unequivocal."

Chartschlaa v. Nationwide Mut. Ins. Co., 538 F.3d 116, 123 (2d.

Cir. 2008); see also In re the Sire Plan, Inc., 100 B.R. 690, 693

(Bankr. S.D.N.Y. 1989) ("[A]ny clear manifestation of the trustee's

intent to abandon property will suffice.") (emphasis in original).

But here, the Notice stated the Trustee's clear intent "to abandon

a cause of action against Andrew Donarumo et al." While the

Trustee's description of the contours of the cause of action in the

"Reasons for Abandonment" section could have been crisper, his

intent to abandon all the claims held by the personal bankruptcy

estate was obvious.7 Despite only referring specifically to

7
Both Chartschlaa and Sire Plan involved trustees whose
actions made it difficult to deduce whether they intended to go
forward with an abandonment at all. See Chartschlaa, 538 F.3d at
120-21 (trustee first filed a notice of abandonment and then,
before the abandonment was approved, asked the court to take no
action on the abandonment); Sire Plan, 100 B.R. at 692-93 (trustee
stated in interim report that asset had no current marketable
value, but took no specific action on abandonment). Here, there is
no question that the Trustee intended the abandonment to go
forward.

It is also important to note that the description of the
claims on the Schedule B ("Claims for Breach of Contract") does not
define the scope of the "cause of action" referred to in the
Notice. Even unscheduled claims may be abandoned pursuant to

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"misrepresentation" and "other business related tort[s]" in his

"Reasons for Abandonment," the Trustee made clear that the cause of

action involved multiple theories of recovery "ar[ising] from the

purchase of a business known as Drew's Plumbing and Heating, Inc.

II." As the bankruptcy court ably recited:

[A]s painful as [the Notice] is to read, its
meaning is unambiguous: The estate holds
claims against Donarumo and perhaps others,
arising from the purchase of a business that
came to be known as Drew's Plumbing; and the
Trustee notices parties in interest of his
intention to abandon those claims, based on
his determination, made after investigation,
that the claims have no or negligible value to
the estate.

Furlong I, 437 B.R. at 720 (emphasis in original).8 The lower

courts were correct in finding that the Trustee's intent to abandon

§ 554(a). See Calabrese v. McHugh, 170 F. Supp. 2d 243, 256 (D.
Conn. 2001); Tschirn v. Secor Bank, 123 B.R. 215, 218 (Bankr. E.D.
La. 1991). Therefore, regardless of the schedule, the Trustee's
intent to abandon all of the claims is dispositive, especially
where the creditors had prior notice of the extent of the claims
after the § 341 creditors' meeting.
8
The Trustee's intent to abandon all claims is also evidenced
in later statements. In an affidavit submitted to the bankruptcy
court on March 1, 2010, the Trustee stated that "all ownership and
control of the claims," which included "a range of business tort
claims as well as breach of contract claims," in both bankruptcy
estates was "relinquished" to the Furlongs and Drew's II. In a
second affidavit submitted on April 7, 2010, the Trustee made clear
his intent to abandon, via the Notice, "the Donarumo litigation."
At the April 14, 2010 hearing on the Motion to Verify before the
bankruptcy court, the Trustee stated that he considered the various
theories of recovery, as well as the corporate and personal
bankruptcies, interchangeable. However, none of these statements
affects our conclusion that the Notice of Intention to Abandon
itself was sufficient to abandon all claims against Donarumo that
were held by the personal bankruptcy estate.

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all state court claims under § 554(a) was clear and unequivocal,

and that all of the claims were therefore abandoned when the

bankruptcy court approved the Notice.

D. The Automatic Stay

Donarumo and Murray Supply challenge the holding below

that the transfer of Drew's II's claims to the Furlongs personally

was not a violation of the automatic stay. Again, we review the

bankruptcy court's findings of fact for clear error and its

conclusions of law de novo. Spenlinhauer, 261 F.3d at 117.

To review, before Drew's II filed for bankruptcy, it

surrendered to its secured lender, Key Bank, its tangible and

intangible assets. Key Bank then sold those assets to Gem

Plumbing. Because of the possibility that Drew's II's "general

intangibles" included the claims against Donarumo, Gem Plumbing

assigned any rights in the claims back to the Furlongs and Drew's

II. The Furlongs, acting as directors at a meeting of the board of

Drew's II at which they were the only attendees, assigned Drew's

II's interest in these claims back to themselves personally.

Donarumo and Murray Supply argue that this transfer of

Drew's II claims was a violation of the automatic stays in both the

corporate bankruptcy and the personal bankruptcy. Both of these

arguments fail.

A pending bankruptcy petition "operates as a stay . . .

of . . . any act to obtain possession of property of the estate or

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of property from the estate or to exercise control over property of

the estate." 11 U.S.C. § 362(a)(3). However, the stay ends when

the bankruptcy estate is closed, id. § 362(c)(2)(A), and the stay

is inapplicable to property that has been removed from the estate,

id. § 362(c)(1).

At the time of the transfer of the claims from Drew's II

to the Furlongs individually, the Drew's II corporate bankruptcy

case had long been closed, and thus the automatic stay on transfers

of its assets was dissolved under § 362(c)(2)(A). Though the

automatic stay in the personal bankruptcy estate was still

effective, we agree with the bankruptcy court that an automatic

stay "does not extend to the assets of a corporation in which the

debtor has an interest, even if the interest is 100% of the

corporate stock." Furlong I, 437 B.R. at 721.9

9
This proposition is well-settled. See Kreisler v. Goldberg,
478 F.3d 209, 214-15 (4th Cir. 2007) (shareholder's interest in
corporation, which was a part of the bankruptcy estate, did not
give that shareholder any direct interest in assets of corporation,
which were outside of the bankruptcy estate and not subject to the
automatic stay, even where actions regarding that asset might
affect the value of the stock); Mar. Elec. Co. v. United Jersey
Bank, 959 F.2d 1194, 1205-06 (3d Cir. 1991) (formal distinctions
between debtor and non-bankrupt corporation are maintained for
purposes of the automatic stay); In re Winer, 158 B.R. 736, 743
(N.D. Ill. 1993) (regardless of a "close nexus" between debtors and
non-debtor entity, non-debtor entity is not subject to automatic
stay); Pers. Designs, Inc. v. Guymar, Inc., 80 B.R. 29, 30 (E.D.
Pa. 1987) (even where bankruptcy debtor is 100% stockholder in
non-bankrupt corporation, automatic stay does not apply to
corporation).

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 Donarumo and Murray Supply also argue that the automatic

stay in the personal bankruptcy was violated because the Furlongs

"used" the Drew's II stock in transferring to themselves the claims

against Donarumo, Drew's II's sole remaining asset. See 11 U.S.C.

§ 363(b)(1); In re Consol. Auto Recyclers, Inc., 123 B.R. 130, 140

(Bankr. D. Me. 1991) (voting of shares constitutes "use" under § 363).

We disagree. Though Massachusetts law requires shareholder approval

of the transfer "of all, or substantially all, of [a corporation's]

property," see Mass. Gen. Laws ch. 156D, § 12.02(a), the Furlongs

were acting in their capacity as directors of Drew's II, not

shareholders, when they effectuated the transfer. Because they

took no actions as shareholders, they did not attempt to vote or

use the Drew's II stock in any way. There was no violation of the

automatic stay.10

E. The Drew's II Stock

The Furlongs challenge the holding that the Drew's II

stock remains a part of the personal bankruptcy estate, as never

having been abandoned. We review the bankruptcy court's findings

of fact for clear error and its conclusions of law de novo.

Spenlinhauer, 261 F.3d at 117.

10
Because, as discussed below, the stock remains within the
personal bankruptcy estate, the Trustee may be able to bring a
derivative action in state court against the Furlongs for improper
transfer of the claims. However, that is for another court to
decide on another day.

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 The Furlongs scheduled their 100% stock ownership in

Drew's II as an asset in their personal bankruptcy. As a part of

the Motion to Verify, the Furlongs moved to compel abandonment of

the stock under § 554(b). While the bankruptcy court never

directly addressed the § 554(b) motion, it did conclude that "there

may yet be value in the stock of Drew's Plumbing,"11 and that the

stock remained property of the estate. Furlong I, 437 B.R. at 721.

Additionally, the Trustee never filed a notice of intent to abandon

the stock under § 554(a), and the personal bankruptcy estate

remains open, so the stock was never abandoned by operation of law

under § 554(c). Therefore, the stock was never formally abandoned

under any provision of § 554 and continues to be property of the

personal bankruptcy estate.

III. Conclusion

Finding no error in the bankruptcy court's decision, we

affirm.

11
Section 554(b) provides that a court may order the
abandonment of property "that is burdensome to the estate or that
is of inconsequential value and benefit to the estate." 11 U.S.C.
§ 554(b).

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