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Memorandum of Decision Re: Prepetition Real Estate CommissionsPursuant to section 541(a) of the Bankruptcy Code, the Bankruptcy estate is vested only with those rights the debtor had as of the commencement of the case. Under the employment contract, Oosterbaan had no rights on that date. As a general rule, postpetition commissions are property of the estate if they are the result of prepetition work. See, e.g., In re Bluman, 125 B.R. 359, 365 (Bkrtcy.E.D.N.Y.1991); In re Froid, 109 B.R. 481, 483 (Bkrtcy.M.D.Fla.1989). However, in all reported cases the court has found where postpetition commissions were held to belong to the estate, both the act and the contractual right to the commission had occurred before the bankruptcy. In this case, while the act of introducing buyer and seller had taken place before bankruptcy nothing which gave right to a commission had occurred before the bankruptcy. The listing itself gave Oosterbaan no rights. The nonbinding letters of intent gave Oosterbaan no rights. Only the close of escrow gave Oosterbaan any rights, pursuant to his employment agreement. However, even the signing of a binding agreement was postpetition. As of the day of filing, Oosterbaan had no legal or equitable rights, only a hope that the parties would reach an agreement which would eventually result in a commission for him. Such a hope is not enough for the estate to claim a right to the commission. For the foregoing reasons, the court will enter a judgment declaring that the trustee has no right, title or interest in the commission. The court notes that this ruling is in accord with the only reported case dealing with the rights of a real estate salesperson, In re Zahneis, 78 B.R. 504 (Bkrtcy.S.D.Ohio 1987). In Zahneis, the court held that the commissions did not belong to the estate even though both the listing and the sale had occurred prepetition, with only the close of escrow happening after the filing. Here, the sale was postpetition as well as the close of escrow. Despite the pleadings of the parties, this is not an action on a contract and nobody is entitled to attorneys' fees. Defendants shall recover their costs, if any. This memorandum constitutes the court's findings and conclusions pursuant to FRCP 52(a) and FRBP 7052. Counsel for Oosterbaan shall submit an appropriate form of judgment forthwith. Dated: May 11, 1994 _______________________ Alan Jaroslovsky U.S. Bankruptcy |

