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enters an order formally closing the proceeding and releasing its
jurisdiction over a bankruptcy estate.
The phrase “termination of an estate” could have differing
meanings in the context of a bankruptcy proceeding. If Congress
had used the phrase “closing of the bankruptcy proceeding”, there
would have been less ambiguity or room for interpretation.
However, either respondent’s or petitioner’s interpretation could
fit within the meaning of the phrase “termination of an estate”.
For example, a bankruptcy estate could be considered to be
terminated when a bankruptcy court enters an order closing the
estate. Likewise, in the context of a plan of reorganization,
when a bankruptcy court confirms a plan and discharges the
debtor, the estate, in substance and effect, may be considered to
be terminated. At that point in the proceeding, the bankruptcy
court’s role is to monitor the plan of reorganization. The
disputed phrase is not defined in the Internal Revenue Code or
the underlying regulations.
Section 350(a) of the Bankruptcy Code specifically provides
for the closing of a bankruptcy proceeding “After an estate is
fully administered and the court has discharged the trustee”. 11
U.S.C. sec. 350(a) (2000). Bankruptcy courts have regularly
defined closing of an estate as the time a final decree is
entered closing the case. See S.S. Retail Stores v. Ekstrom, 216
F.3d 882, 884 (9th Cir. 2000); In re Duplan Corp., 212 F.3d 144,
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Last modified: May 25, 2011