Teresa Gail Baker

IN THE UNITED STATES BANKRUPTCY COURT FOR
THE EASTERN DISTRICT OF TENNESSEE
SOUTHERN DIVISION
In re: )
)
Teresa Gail Baker ) No. 1:15-bk-10706-NWW
) Chapter 7
Debtor )
M E M O R A N D U M
In this case, the court has scheduled an evidentiary hearing to be held on
October 29, 2026, regarding a motion to compel the chapter 7 trustee to abandon
property of the estate filed by Cynthia Nelms Mulkey; Marvin C. Nelms; Michael E.
Nelms; Deborah N. Jones; Angela N. Marcus; Karen S. Nelms, individually and as
Administratrix of the Estate of Jeffrey L. Nelms; Ronald S. Nelms; and Gwendolyn N.
Lawson on November 26, 2025.
Before the court now is the trustee's motion for summary judgment on that
motion to compel abandonment. ECF No. 278.
SIGNED this 9th day of September, 2026
_____________________________________________________________
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I. Summary Judgment Standard
A party is entitled to summary judgment if “the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a); Fed. R. Bankr. P. 7056. W hen deciding a motion
for summary judgment, the court construes all reasonable inferences in favor of the
nonmoving party. Waeschle v. Dragovic, 576 F.3d 539, 543 (6th Cir. 2009) (citing
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)). W hen
the evidence would permit a reasonable jury to return a verdict for the nonmoving party,
a genuine issue of material fact exists, and the court must deny summary judgment.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
In the face of a summary judgment motion, the nonmoving party may not rest on
its pleadings, but must come forward with some probative evidence to support its claim.
Celotex v. Catrett, 477 U.S. 317, 325 (1986); 60 Ivy St. Corp. v. Alexander, 822 F.2d
1432, 1435 (6th Cir. 1987) (holding that a nonmoving party must present “some
significant probative evidence which makes it necessary to resolve the parties' differing
versions of the dispute at trial”). According to Federal Rule of Civil Procedure 56(c)(1),
“[a] party asserting that a fact . . . is genuinely disputed must support the assertion by
. . . citing to particular parts of materials in the record . . . or . . . showing that the
materials cited do not establish the absence . . . of a genuine dispute, or that an
adverse party cannot produce admissible evidence to support the fact.”
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II. Background
On February 20, 2015, Teresa Gail Baker filed a petition for relief under chapter
13 of the Bankruptcy Code. The day before a hearing on objections to confirmation of
the debtor's proposed plan of reorganization, she converted the case voluntarily to one
under chapter 7.
On April 30, 2015, a chapter 7 trustee was appointed. Although over eleven
years have passed since then, this case remains open due to unusual circumstances in
administering part of the bankruptcy estate.
The estate includes the debtor’s one-twelfth interest in five unimproved real
property lots located in DeKalb County, Georgia. Four of the five lots are contiguous,
totaling 14.62 acres, with the fifth lot being separated from the others by a railroad. Only
one of the four connected lots has access to a public road. T he other three lots are
landlocked.
Beginning in 1955, the debtor’s grandfather leased land to DeKalb County for
use as a landfill. The trustee contends that the entire landf ill area consisting of approxi-
mately 11 acres is spread out over three of the four contiguous lots, including a portion
of the lot that provides access to a road.
In 2016, the chapter 7 trustee commenced an adversary proceeding seeking
authority under 11 U.S.C. § 363(h) to sell both the debtor’s one-tw elfth interest and also
the co-owners’ eleven-twelfths interest in the DeKalb County lots.
1:16-ap-01029-NWW, ECF No. 1. Eight years later (on January 15, 2024), the trustee
filed a settlement motion in the bankruptcy case, seeking to approve a settlement
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between the parties to that adversary proceeding that would allow the trustee to market
for sale the four lots.
Following responsive pleadings and a hearing, the court approved the settlement
agreement. ECF No. 189 (March 21, 2024 settlement order). That settlement order
authorizes the trustee to market for sale the four connected lots free of the eleven-
twelfths interest of the co-owners pursuant to 11 U.S.C. § 363(h). Id. at 7–8. The
settlement order also states that “[t]he [t]rustee shall negotiate with the Georgia
Department of Natural Resources, Environmental Protection Division, and/or DeKalb
County, and/or any other governmental agency as he sees fit to resolve any issues
(including, without limitation, subdivision, access and/or sale) regarding the landfill”
located on the property. Id. at 8 (emphasis added).
Since 2016, the trustee has attempted to market and sell the properties he
maintains are prime for development, absent the landfill. After years of speaking with
developers and negotiating with DeKalb County, the trustee identified two ways to
achieve a sale:
1) Either the county remediates the landfill portion of the properties, or
2) The county grants a subdivision variance that removes the landfill from
the properties to be sold.
DeKalb County's subdivision regulations require that parcels must front eighty-
five feet on a public road—something made impossible by a landfill blocking the only
access to a road. Faced with delay and opposition to his two identified options, the
trustee filed another adversary proceeding on March 16, 2026, pursuing an inverse
condemnation claim against the county. 1:26-ap-1005-NWW, ECF No. 1. The com-
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plaint alleges that the county's refusal to remediate the landfill coupled with its refusal to
grant a subdivision variance amounts to a taking without just compensation because its
actions and inactions have made it impossible to develop and market the debtor’s
interest in the properties, the bankruptcy estate’s most valuable asset. In that pending
adversary proceeding, the trustee seeks just compensation for DeKalb County's
purported taking of the properties.
III. Analysis
Against that backdrop of ongoing attempts to market the DeKalb County lots and
the co-owners seeking abandonment of the properties, the trustee seeks to resolve the
abandonment motion by way of summary judgment.
The trustee argues that the court's March 21, 2024 settlement order is final and
unappealable and that the movant's abandonment motion is an impermissible collateral
attack on that order. He also argues that res judicata should apply because the
movants, as parties to the settlement order, could have raised in 2024 the issues now
raised for abandonment, namely that the property is burdensome based upon how
many years it has remained unadministered in the bankruptcy estate.
The movants disagree and assert that they are not trying to undo the settlement
order but are instead focusing on the present condition of the bankruptcy estate and
whether the trustee should now abandon the properties because of how burdensome
they have become.
The movants' abandonment request is governed by section 554(b) of the
Bankruptcy Code, which states that on request of an interested party, “the court may
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order the trustee to abandon any property of the estate that is burdensome to the
estate or that is of inconsequential value and benefit to the estate.”
The first ORDERED paragraph of the March 21, 2024 settlement order
“authorize[s the trustee] to market for sale, subject to appropriate notice and approval of
the Court, the [DeKalb County lots], free of the interests of the co-owners pursuant to
§ 363(h) of the Bankruptcy Code.” ECF No. 189 at 7. That order also states that the
trustee “may market the [lots] as provided in this order and will sign contracts pertaining
to [the lots] subject to Court approval.” Id. at 8 para. 4. The order continues that the
trustee must “notice the sale for any portion (or all) of the Property in Bankruptcy Court
providing the opportunity to be heard by all parties in interest.” Id. at 9 para. 4.
Nothing in that order determined that the DeKalb County lots should not be
abandoned. Nowhere in the order did it find that the properties were not burdensome or
of inconsequential value and benefit to the estate. Abandonment and section 554 are
not referenced anytime in the twenty-one page settlement order.
That order was a memorialization of an agreement entered into between the
trustee and the movants in 2017, which at the time was only two years after the
bankruptcy case had been filed. Because the trustee ran into trouble marketing the
properties, he simply did not seek court approval of the settlement until 2024. Had the
settlement been approved by the court in 2017, that would not have changed the
movants' primary argument for abandonment now, that the properties are burdensome
for the trustee to administer to the point that he should abandon them from property of
the estate.
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While the settlement order predetermines a number of sale terms—such as
requiring all parties to promptly comply with a sale order and declaring that all valid liens
would be paid in full—it contemplates that any proposed sale will be subject to its own
motion for the court to approve the sale, and it anticipates that parties in interest can
oppose the sale. Quite simply, nothing in the settlement order precludes the movants
from seeking relief that section 554 of the Bankruptcy Code allows them to request. The
grounds for seeking abandonment (burdensome or inconsequential value and benefit to
the estate) are distinct from the grounds to approve a sale. The trustee has obtained
only the ability under section 363(h) to market the properties free and clear of the
movants' eleven-twelfths interest.
This case is dual-tracking connected issues. In one track, the trustee is pursuing
legal actions that he hopes will result in an ability to market the DeKalb County lots. If
he is successfully able to market them, overcome any opposition to a sale, and then
close a sale, he anticipates generating millions of dollars for the estate and the
nondebtor co-owners of the properties, more than sufficient to pay creditors' claims in
full, as well as all administrative expenses. He has not obtained approval of a sale yet,
though. Despite eleven years' worth of effort and different tactics, all the trustee has
obtained is authority to market the properties.
In the other track, the movants are pursuing abandonment of property they own
with the debtor. They have communicated with the trustee for years. They entered into
a settlement allowing the trustee to market their property free and clear of their interest.
After a decade of the property not being sold, however, they have grown tired of
waiting. As parties in interest, section 554(b) of the Bankruptcy Code affords them the
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right to seek abandonment of their property on the grounds that it is too “burdensome”
for the trustee to administer or it is “of inconsequential value and benefit to the estate.”
Whether either of those grounds exist was not litigated and determined by the settle-
ment approved by this court.
Unquestionably, the movants could have sought abandonment of the properties
before entering into the settlement allowing the trustee to market the properties. They
also could have sought abandonment when opposing the court’s approval of the
settlement. They did neither. However, neither collateral estoppel nor res judicata
principles preclude them from seeking such relief now. To apply those principles as
broadly as the trustee suggests would mean that the trustee could potentially hold the
properties hostage forever, even if he is unsuccessful in the prosecution of his inverse
condemnation proceeding against DeKalb County and the liquidation of the properties
is determined to be impossible. Neither the Bankruptcy Code nor the settlement
agreement afford the trustee such unlimited authority or discretion.
In sum, both the trustee and the movants are pursuing competing paths relative
to the properties. The trustee is seeking to “collect and reduce to money the property of
the estate” as prescribed by 11 U.S.C. § 704(a)(1). The movants want the property of
the estate abandoned pursuant to 11 U.S.C. § 554(b). One of those two outcomes will
happen. Which one, though, is not yet clear. What is probable is that which outcome
occurs will be determined by the resolution of the inverse condemnation proceeding
pending against DeKalb County, Georgia. All that is clear today is that genuine issues
of material fact remain regarding whether the properties are “burdensome” or are “of
inconsequential value and benefit to the estate.”
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IV. Conclusion
For the reasons stated in this opinion, the court will deny the trustee's motion for
summary judgment. By separate order, the court will enter a ruling consistent with this
memorandum opinion.
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