Bankrupt Developer Can Claim Trustee Violates 13th Amendment

A bankrupt real estate developer has standing to argue that appointing a trustee in his Chapter 11 case amounts to involuntary servitude in violation of the 13th Amendment, the Eleventh Circuit ruled.

The appointment “sufficiently diminished” Charles Breland Jr.'s ability to control his assets, the U.S. Court of Appeals for the Eleventh Circuit said Wednesday.

When the bankruptcy court appointed the trustee, Breland lost the ability to seek permission to use, lease, or sell property; borrow money; or exercise a number of other powers under the bankruptcy code, the court said. That’s enough to create an injury for purposes of ...