## Facts

- Several debtors, including Marc William Dittmar, were union-represented employees who moved from Boeing to Spirit AeroSystems when Spirit acquired Boeing’s Wichita plant.
- During collective bargaining, Spirit proposed a 10% wage cut and, as part of the negotiated compensation package, an equity participation program (EPP) funded by stock appreciation rights (SARs) payable only if a defined “payment event” later occurred.
- The EPP was negotiated in connection with the collective bargaining agreements (CBAs), though some eligibility and operational details were not fully set out in the CBA text.
- After the CBAs were ratified but before any payment event occurred, the debtors filed Chapter 7 bankruptcy petitions.
- Post-petition, Spirit issued formal plan documentation and, shortly thereafter, a payment event occurred, triggering distributions of cash and stock attributable to the SARs to eligible employees, including the debtors.
- Chapter 7 trustees sought turnover of the distributions, contending the debtors held contingent interests at filing that became property of the estates under 11 U.S.C. § 541(a).
- The bankruptcy court and a divided Bankruptcy Appellate Panel held the distributions were not estate property, reasoning the debtors had no cognizable interest at filing.
- The trustees appealed, and multiple similar cases were consolidated.

## Issues

1. Whether debtors’ contingent rights to receive cash and stock distributions under Spirit’s EPP/SARs, triggered by a post-petition payment event, were “property of the estate” under 11 U.S.C. § 541(a).
2. Whether the debtors’ pre-petition connection to the EPP through collective bargaining and wage concessions created a legally cognizable contingent interest at the petition date, rather than a mere expectancy.

## Decision

- The Tenth Circuit reversed.
- The court held the debtors’ rights to the SAR-based distributions were property of the bankruptcy estates under § 541(a).
- The court remanded for administration of the distributions as estate assets.

## Legal Principles

- Section 541(a) broadly includes all legal or equitable interests of the debtor at the petition date, including contingent and unliquidated interests; an interest need not be vested or immediately enforceable to enter the estate.
- State law informs whether the debtor has a cognizable interest at filing; federal bankruptcy law determines whether that interest becomes estate property.
- Under the “sufficiently rooted in the pre-bankruptcy past” test, a post-petition payment can be estate property when it represents the maturation of a pre-petition contingent right.
- A bargained-for, employment-related benefit tied to pre-petition consideration (e.g., wage concessions in collective bargaining) may create a contingent contractual right, not a mere hope of future generosity.

## Conclusion

The court treated the SAR distributions as the post-petition realization of contingent rights created through pre-petition collective bargaining and wage concessions, bringing the distributions into the bankruptcy estates under § 541(a).


In re Dittmar, 618 F.3d 1199 (10th Cir. 2010)