Kaler v. Bala, No. 13-1086 (8th Cir. 2014)
Annotate this CaseAppellant appealed the Bankruptcy Appellate Panel's (BAP) judgment holding that the bankruptcy estate of her former employer, Racing Services, was entitled to the liquidation proceeds of a cash-value life insurance policy the employer purchased for her. Because the trustee had presented no evidence demonstrating that appellant could have demonstrated insurability, the court rejected the argument that the purported "equities" of this case required that the court deem appellant's failure to reinstate the policy as an act of surrender. The terms of the agreement between appellant and Racing Services granted Racing Services only the limited right to receive a repayment of policy premiums from the cash value upon surrender of the policy. Accordingly, the court reversed where appellant at no time surrendered the policy and the estate did not possess a right to control the policy or receive its liquidation proceeds.
Court Description: Civil case - Bankruptcy. Bankruptcy Appellate Panel judgment holding the bankruptcy estate of Bala's former employer was entitled to the liquidation proceeds of a cash-value life insurance policy the employer had purchased for her is reversed; the terms of the agreement between Bala and the employer granted the employer only the limited right to receive a repayment of the policy premiums from the cash value upon surrender of the policy, and since Bala never surrendered the policy, the estate did not possess a right to control the policy or receive its liquidation proceeds. Chief Judge Riley, concurring in the judgment.
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