- 17 - The approval of the plan and the concurrent discharge facilitates the debtor’s continuing his prebankruptcy activity. At that juncture, the estate is generally relieved of the administration of the debtor’s property. Logically, the debtor should be able to go forward with prebankruptcy activity, including any assumption of tax attributes of the bankruptcy estate. It would be illogical to keep a debtor from a tax loss that might assist in the rehabilitation process during a period when the estate was, for all effects and purposes, dormant. In the case we consider, petitioner was the debtor in his chapter 11 reorganization.5 Recognizing that chapter 11 bankruptcy reorganizations are intended to rehabilitate the debtor, we note that section 1141 of the Bankruptcy Code provides “Except as otherwise provided in the plan or the order confirming the plan, the confirmation of a plan vests all of the property of the estate in the debtor.” 11 U.S.C. sec. 1141(b) (2000). Those bankruptcy cases which have held that termination occurs upon confirmation were chapter 11 bankruptcy reorganizations, and the deciding courts placed reliance on section 1141 of the Bankruptcy Code. We must note that section 1141 of the Bankruptcy Code applies only to chapter 11 bankruptcies. See Cusano v. Klein, 264 F.3d 936 (9th Cir. 2001). We also recognize that the phrase 5 We do not consider here whether the phrase “termination of an estate” should be universally understood in the context of all types of bankruptcy proceedings.Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Next
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