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Home / Case Digests / 00-2902 In re: Dennis E. Carlson, Debtor

00-2902 In re: Dennis E. Carlson, Debtor

“The Bankruptcy Code requires the debtor to list as assets of the estate in bankruptcy ‘all legal or equitable interests of the debtor in property as of the commencement of the case.’ 11 U.S.C. sec. 541(a). The term ‘legal or equitable interests … in property’ has been broadly interpreted to include any legally enforceable right. …, except (so far as bears on this case), as the statute goes on to state, ‘earnings from services performed by an individual debtor after the commencement’ of the bankruptcy proceeding. 11 U.S.C. sec. 541(a)(6). That a lawyer has a legally enforceable interest in a potential contingent fee is shown by the fact that if the client terminates his employment before judgment or settlement (for reasons other than wrongful conduct by the lawyer) and so before the lawyer receives any fee, he is entitled to the fair value of the services that he performed up to the termination. … This is true even if he withdraws rather than being terminated, provided the withdrawal is for good cause… It follows that the fair value of the services rendered by a contingent-fee lawyer up to the date of his bankruptcy (though not after, by virtue of section 541(a)(6)) is property of his estate in bankruptcy.”

Affirmed.

Appeal from the United States District Court for the Northern District of Illinois, Aspen, J., Posner, J.


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