A Tale of Two Residences

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We had a dream we’d go trav’lin, together
We’d spread a little lovin then we’d keep movin’ on
Trav’lin’ along there’s a song that we’re singin’,
C’mon get happy
A whole lotta lovin’ is what we’ll be bringin’,
We’ll make you happy,
We’ll make you happy

(from “C’Mon Get Happy”)

This edition of Bankruptcy Beach Reading takes us on a summer road trip from the sandy beaches of Fort Lauderdale, Florida to the beautiful mountains of Colorado to explore two very different residences through two bankruptcy cases filed a day apart in February of this year.

First to Florida and the pending chapter 11 case of Mr. David Cassidy: member of the Partridge Family, teen heart-throb and, for our younger readers, father of Katie Cassidy (model and actress appearing on the CW’s The Arrow).  Following a rough year of DWI arrests and divorce proceedings, Cassidy filed for chapter 11 bankruptcy on February 11, 2015.  Cassidy’s $3 million plus residence is a “beautiful seven thousand square foot family residence located on the water in the Harbor Beach neighborhood of Fort Lauderdale Florida” and is burdened by secured debt of approximately $1.65 million.  Because of his extensive travel schedule and pending divorce, Cassidy no longer requires such a large residence and, accordingly, moved to sell the residence under section 363 of the Bankruptcy Code free and clear of all liens and other encumbrances. Both the bank, secured by the residence, and Cassidy’s soon to be ex-wife agreed to the sale of the residence via auction and the proposed disposition of the sale proceeds.  Specifically, Cassidy proposed that, after auction fees and costs, proceeds would be used to satisfy creditors secured by the property, with any remaining proceeds to be distributed in accordance with the divorce and bankruptcy proceedings.  The bankruptcy court granted the motion on June 29, 2015, and the auction, for any interested parties willing to put down a $200,000 deposit, will be held on September 9, 2015.

Moving on to Colorado, we have a very different residence.  Mr. Edward Romero filed for chapter 7 bankruptcy on February 12, 2015 claiming a homestead exemption for his residence – a 1997 Peterbilt truck worth approximately $45,000.  Mr. Romero has lived in the Peterbilt since 1998.  It is equipped with a bed, refrigerator, microwave, television and self-enclosed portable toilet.  A small kennel for Mr. Romero’s dog remains by the bed.  The debtor, an independent truck driver, sleeps in the Peterbilt approximately 20-25 days a month while on the road travelling throughout the United States.  Mr. Romero has no other permanent residence or place to sleep, not even the one small room he rents from his son as an office for his trucking business.  For the few nights when not travelling, he stays as a guest of friends or family.  Though home is usually where you hang your hat, the bankruptcy court in Colorado, driven by the necessity of statutory interpretation, could not agree that the Peterbilt qualified as a homestead.  The bankruptcy court was stymied by modifications to Colorado’s homestead exemption specifically addressing manufactured homes, and not including vehicles such as the Peterbilt, and the traditional meaning of homestead under Colorado law, which requires an association with land.  Recognizing the potential inequities of the ruling, however, the bankruptcy court suggested that the debtor may be able to claim another exemption under Colorado law, such as the exemption for equipment used to carry on gainful occupation or for a motor vehicle, or explore his alternatives under chapter 13 of the Bankruptcy Code.

We are rooting for both Mr. Cassidy and Mr. Romero.  Surely, though, we are not alone in seeing the opportunity for great television (not unlike Mr. Cassidy’s original series!).  Whether poignant sitcom or cheesy reality TV, the script almost writes itself.  Two down on their luck travelers meet in bankruptcy court and decide to travel the country together living in a certain colorfully painted bus.  It would be called, of course, C’mon Get Happy.  Perhaps it would even sway the hearts and minds of legislators to amend the homestead exemption for such a bus, just in case.