14 B 13155
The Debtors claimed three exemptions against $23,000 in settlement proceeds derived from a workplace discrimination and disability lawsuit initiated by Debtor James Henry Sullivan, Jr. against his former employer.  The chapter 7 trustee (the “Trustee”) objected to the Debtors’ exemptions pursuant to Bankruptcy Rule 4003(b) on the basis that they were not properly claimed under Illinois law.  The Trustee had intervened and later settled the legal claims in the lawsuit with the authorization of the Court pursuant to Bankruptcy Rule 9019(a).  Without addressing the merits of the Trustee’s objection, the Debtors argued that they had been deprived of their due process rights with respect to the Trustee’s settlement motion.  The Court found that there was no violation of due process in connection with the settlement motion and that the Debtors had not made proper claims of exemption under Illinois law.  Thus, the Court sustained the Trustee’s objection and disallowed the Debtors’ amended claims of exemption.