Judge Harry C Dees, Jr. has ruled that Notre Dame football season tickets are not tangible, and thus sustained the chapter 7 trustee’s objection to the exemption the debtor claimed in the bankruptcy case. This allows the trustee to liquidate the asset, as it was not exempt in the case.
In the chapter 7 case, the debtor claimed an exemption for the Notre Dame Football season tickets, for $1100, the price that she paid for them. She was an employee, and got the tickets at a discount since she was an employee of the University. They were worth a lot more on the open market.
Both parties briefed the matter, as the judge said it was a matter of first impression in his courtroom. Are tickets tangible? Intangible?
The judge analyzed state law, case law, and legislative history when making the decision. The 7th Circuit has decided that cash is intangible in the case In re Oakley, 344 F.3d 709 (7th Cir. 2003), deciding that the legislative intent of making the tangible property exemption larger in order to protect life’s necessities, such as clothing, furniture, and toilet paper. Thus allowing for protections for things that make it possible to function.
The court in the current case, agrees with the decision in Oakley, stating:
In Oakley the Seventh Circuit held that although currency is tangible in the literal sense, it is nonetheless an intangible asset in Indiana for exemption purposes. Id. at 713. The court finds this guidance is persuasive in assessing the question before it. Like currency, tickets have no inherent or intrinsic value in and of themselves. Any value comes from the ability to use the ticket for admission to an event, just as the value in cash stems from the ability to exchange cash for useful goods. If not for the license the football ticket grants its holder to enter an event venue, a football ticket has no more inherent value than any other scrap of paper.
Unfortunately, the judge decided that the Notre Dame Football season tickets were not necessary to enjoy a fresh financial start. As such, the trustee will be liquidating the asset. So if you are looking to enjoy a Notre Dame football game, another set of tickets may be available!