Howard Ehrenberg, Chapter 7 Trustee v. Southern California Permanente Medical Group

Appellant Howard M. Ehrenberg (“Ehrenberg”), Chapter 7 bankruptcy trustee for Max Moses (“Debtor Moses”) and Marlene Moses (collectively the “Debtors”), appeals from the decision of the Bankruptcy Appellate Panel (“BAP”) which concluded that Debtor Moses’ Keogh Plan (“Keogh Plan” or “Plan”) was excluded from the bankruptcy estate.

Appellees and cross-appellants Southern California Permanente Medical Group and the Retirement Committee for the Southern California Permanente Medical Group Retirement Plan (collectively “SCPMG”) cross-appeal from the decision of the BAP which concluded that Debtor Moses’ Keogh Plan did not contain an enforceable anti-alienation provision under federal law.

We hold that, pursuant to 11 U.S.C. § 641 (c)(2) and California state spendthrift law, the Plan is not property of the bankruptcy estate. Because the Plan is excluded in its entirety under California state spendthrift law, we need not reach the merits of SCPMG’s cross-appeal. Accordingly, we affirm the decision of the BAP excluding the Keogh Plan from the bankruptcy estate.

I.

FACTUAL AND PROCEDURAL BACKGROUND

Debtor Moses is a physician who elected to participate in a Keogh Plan offered by…