In Re Alicia Marie Richards

I. FACTUAL AND PROCEDURAL BACKGROUND

During acrimonious divorce proceedings in state court, Debtor filed for Chapter 7 bankruptcy on March 12, 2021. Interpleader Appeal, Dkt. No. 34-2. In her initial bankruptcy schedules, Debtor disclosed an interest, including a homestead exemption, in real property in Newport Beach, California. Id. This real property, which had been the marital residence of Debtor and her ex-husband and which the Debtor had identified as community property, is the primary asset of the bankruptcy estate. On July 7, 2021, the bankruptcy court lifted the automatic stay on Debtor’s divorce proceedings, except as to “matters related to the sale of the subject Newport Beach real property and/or the eviction of Debtor from the property.” Interpleader Appeal, Dkt. No. 34-9.

The Trustee moved for the turnover and sale of the home under 11 U.S.C. § 363. Motion to Amend Appeal, Dkt. Nos. 26-2, 26-5. Over Appellants’ objections, the bankruptcy court granted the motion and entered a sale order that was later amended. Motion to Amend Appeal, Dkt. Nos. 26-25, 26-37, 26-29. Debtor filed an ex parte application to stay the turnover and sale orders, Interpleader…