Bankruptcy

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7^th Circuit Court of Appeals

Case Name: Estate of Soad Wattar v. Horace Fox, Jr.

Case No.: 17-1615

Officials: Easterbrook, Wood, and Kirsch, Circuit Judges.

Focus: Bankruptcy

In 2010, the United States Bankruptcy Court for the Northern District of Illinois ruled that all assets held by the Soad Wattar Revocable Living Trust—including the Wattar family home—were part of the bankruptcy estate of Richard Sharif. Sharif was the son of Soad Wattar, now deceased. As the sole trustee of the Wattar trust, Sharif had full control of its assets. Sharif’s sisters, Haifa and Ragda Sharifeh, soon launched an effort to keep the trust proceeds out of their brother’s bankruptcy estate; their strategy was to show that it was they who owned the trust assets, not their brother.

At issue in these appeals are the bankruptcy court’s rulings on three motions: (1) Haifa’s 2015 motion to vacate the court’s decision that all trust assets belonged to the bankruptcy estate; (2) the sisters’ joint 2016 motion for leave to sue the Chapter 7 trustee assigned to Sharif’s bankruptcy for purported due‐process violations; and (3) Ragda’s 2016 motion seeking both reimbursement of money she allegedly spent on the family home and the proceeds from Wattar’s life insurance policy, which the court had found to be an asset of the trust and therefore part of the bankruptcy estate. The bankruptcy court denied all three motions and sanctioned the sisters and their lawyer, Maurice Salem. Each ruling was affirmed on appeal to the district court. The Seventh Circuit was not persuaded by the appellants’ arguments (to the extent they develop any) than were the judges who already rejected them.

The Seventh Circuit adds that barring these litigants from further filings in the bankruptcy action was a sensible response to their frivolous attempts to undermine long‐settled issues.

Affirmed.

Decided 06/16/23

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