May 31, 2016 Articles

Lawful Searches by Bankruptcy Trustees

A growing body of law has expanded the powers of the bankruptcy court to authorize home searches for the discovery of hidden assets or cash.

By Thad Davis and Peter Bach-y-Rita

Curtis James Jackson III, also known as 50 Cent, filed a chapter 11 case in the District of Connecticut on July 13, 2015, listing zero cash on hand. But he later posted photographs on social media in which he posed with piles of cash, including one ironically arranged to form the word “Broke”. In February 2016, the United States Trustee filed a motion for an order compelling Jackson to appear for an examination under Rule 2004 of the Federal Rules of Bankruptcy Procedure. Jackson filed an opposition arguing that the cash depicted in the photos was not real and that “[p]rop money is routinely used in the entertainment industry, including in movies, television shows, videos, and social media postings.” (In re Curtis James Jackson, III, Case No. 15-21233 (Bankr. D. Conn. Mar. 8, 2016 [Docket No. 388].)

There is something especially interesting about Jackson’s case that goes beyond the usual celebrity factor. It raises all sorts of post-modern questions about what the court should believe in a bizarre celebrity culture that deliberately bends distinctions between real personality and public persona. Did Jackson pose with piles of cash or was that just 50 Cent?

However fascinating those questions are, this article deals with a much more practical one. Assuming that the court did appoint an examiner or a trustee (as requested by a group of unsecured creditors), the next obvious step would be for that person to go and find the piles of bills in Jackson’s house to conclusively determine whether they are real or fake. And that raises a question that rarely comes up but blurs the boundaries between criminal law and Title 11 of the United States Code: Can the bankruptcy court authorize the trustee to search a debtor’s home?

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