            United States Bankruptcy Appellate Panel
                        FOR THE EIGHTH CIRCUIT

                                    ________

                                 No. 12-6003
                                  ________
                                       *
In re:                                 *
                                       *
Cathleen Mary Foellmi,                 *
formerly known as Cathleen Mary Esch, *
                                       *
       Debtor.                         *
_________________________________ *
                                       *          Appeal from the United States
Cathleen Mary Foellmi,                 *          Bankruptcy Court for the
                                       *          District of Minnesota
       Debtor – Appellant              *
                                       *
             v.                        *
                                       *
Charles W. Ries,                       *
                                       *
       Trustee – Appellee              *
                                  ________

                            Submitted: June 20, 2012
                              Filed: July 31, 2012
                                   ________

FEDERMAN, VENTERS and SALADINO, Bankruptcy Judges
                                    ________
VENTERS, Bankruptcy Judge.


       The Debtor appeals the bankruptcy court’s order denying the Debtor’s claim
of an exemption for limited partnership units that she received from her employer,
Kwik Trip, Inc. For the following reasons, we reverse the decision of the
bankruptcy court.

                                  BACKGROUND
       The Debtor, Cathleen Mary Foellmi, filed a Chapter 7 bankruptcy petition
on February 16, 2011. On Schedule B, she listed an asset described as “CSI Kwik
Trip Profit Sharing,” valued at $58,217. She originally claimed an exemption for
the full value of this asset under 11 U.S.C. § 522(d)(10)(E). The Trustee objected,
and the bankruptcy court sustained the Trustee’s objection on May 20, 2011. The
Debtor then amended her Schedule C to claim the exemption under 11 U.S.C. §
522(d)(5). Once again, the Trustee objected, and before a ruling was entered the
Debtor again amended Schedule C, this time to claim the exemption under Minn.
Stat. § 550.37, Subd. 24.1 The Debtor valued the asset at $69,109.97 and claimed
the full amount as exempt, asserting that the amount over the statutory limit of
$66,000 was reasonably necessary for her support.

      The asset at issue is twenty units of ownership in a limited partnership called
“Convenience Store Investments” (the “Limited Partnership” or “CSI”). The
Limited Partnership was formed in 1989 as an affiliate of Kwik Trip, Inc.

       Units in the Limited Partnership are distributed to qualified employees of
Kwik Trip pursuant to an employee benefit plan (“Benefit Plan”) created by Kwik
Trip, Inc., in 1991.2 According to the Disclosure Statement, the purpose of the
Benefit Plan is “to provide employees who participate in the Plan with a tangible
stake in Kwik Trip's business, with the ultimate goal being the promotion of


1
  Apparently, the bankruptcy court permitted the Debtor to amend her exemption and
deemed the objection on file to apply to the Debtor’s amended exemption under Minn.
Stat. § 550.37, Subd. 24 instead of ruling on the Trustee’s objection to the exemption
claimed under 11 U.S.C. § 522(d)(5).
2
  Only the Plan’s Disclosure Statement is in evidence, but the Trustee hasn’t claimed
that the Plan differs from the Disclosure Statement, so the absence of the Plan is not
an issue.
greater employee loyalty and a general enhancement of the working environment
for Kwik Trip employees.”

       Under the Benefit Plan, only employees with at least five years of
continuous service (two years for management employees) can become limited
partners. Additional Limited Partnership units purchased by Kwik Trip are
allocated yearly to participating employees.

     The Limited Partnership is governed by an “Amended and Restated
Agreement of Limited Partnership.”

       Article IV of the Agreement provides for allocation of profits and losses
among the partners in proportion to the number of units held by each. The Debtor
received cash distributions of $2,160 in 2009 and $4,580 in 2010. The Debtor’s
2009 Schedule K-1 indicates that there was also a $6,640 “net rental real estate
loss.”

      Under the original terms of the Limited Partnership Agreement, a limited
partner could withdraw at any time by requesting redemption of his or her units,
but the General Partner could refuse to recognize any request for redemption of
Units “for any reason whatsoever.” Redemption rights were further restricted on
March 28, 1994, when the General Partner announced that it would no longer
honor requests for redemption, “except in the case where the unitholder is no
longer employed by Kwik Trip, Inc.”

       Finally, § 8.3 of the Agreement provides that if a limited partner becomes
bankrupt, the trustee of his estate “shall have title to the Units held by the Limited
Partner at the time of his . . . bankruptcy and shall have all the rights of a Limited
Partner for the purpose of settling or managing the . . . bankrupt Limited Partner’s
estate.”3

3
 The bankruptcy court held, and we agree, that this provision does not affect the
analysis of the Debtor’s exemption rights. If her interest in CSI is exempt, title to the
       On January 11, 2012, the bankruptcy court sustained the Trustee’s objection
to the Debtor’s claim of exemption under Minn. Stat. § 550.37, Subd. 24. The
bankruptcy court noted four reasons why the Debtor’s interest in the limited
partnership didn’t meet these criteria: (1) The plan wasn’t a “retirement or
disability plan” because its stated purpose was “to provide employees who
participate in the Plan with a tangible stake in Kwik Trip's business, with the
ultimate goal being the promotion of greater employee loyalty and a general
enhancement of the working environment for Kwik Trip employees.” (2)
Partnership interests simply aren’t exempt under § 550.37. (3) The Debtor’s
interest in the limited partnership had to be redeemed upon termination of her
employment from Kwik Trip. And (4) the distribution of profits and losses, and
the partnership units themselves, are not rights to payment on account of illness,
disability, death, age or length of service. “The only link to disability or qualified
retirement is that redemption of the partnership units is not required by termination
of employment due to disability or qualified retirement, as it is with all other
termination of employment events.”

      The Debtor timely appealed.

                                JURISDICTION
       An order denying a debtor’s exemption is a final order over which we have
jurisdiction under 28 U.S.C. §158(b).4

                        STANDARD OF REVIEW
      The bankruptcy court’s determination that the Debtor is not entitled to an
exemption under Minn. Stat. § 550.37, Subd. 24 is a question of law subject to de
novo review.5



interests would revert to the Debtor.
4
  See In re Huebner, 986 F.2d 1222, 1223 (8th Cir. 1993).
5
  See In re Peterson, 897 F.2d 935, 937 (8th Cir. 1990) (entitlement to exemption is
a question of law subject to de novo review).
                                 DISCUSSION
       Our analysis begins with the text of the statute on which the Debtor bases
her claim of exemption, Minn. Stat. § 550.37, Subd. 24:

      Employee benefits. (a) The debtor's right to receive present or future
      payments, or payments received by the debtor, under a stock bonus,
      pension, profit sharing, annuity, individual retirement account, Roth
      IRA, individual retirement annuity, simplified employee pension, or
      similar plan or contract on account of illness, disability, death, age, or
      length of service, to the extent of the debtor's aggregate interest under
      all plans and contracts up to a present value of $30,0006 and additional
      amounts under all the plans and contracts to the extent reasonably
      necessary for the support of the debtor and any spouse or dependent of
      the debtor.

      Interpreting this exemption statute liberally, as we must,7 we hold that it
exempts the Debtor’s interest in the CSI Limited Partnership to the extent of
$66,000, the statutory maximum.

       To qualify for the exemption under § 550.37, Subd 24, a plan must meet
three criteria: (1) the debtor must have the right to receive, or have received,
payments under a stock bonus, pension, profit sharing, annuity, individual
retirement account, Roth IRA, individual retirement annuity, simplified employee
pension or similar plan; (2) the right to receive the payments, or payments
received, must be (or have been) on account of illness, disability, death, age or
length of service; and (3) the debtor's aggregate interest under all such plans and
contracts must have a present value of no more than $66,000 or be reasonably
necessary for the debtor’s support.8


6
   Subdivision 4a of this provision provides for the periodic adjustment of the dollar
amounts of the exemptions. The base exemption amount for the relevant time period
was $66,000.
7
  See Bryan v. Stanton (In re Bryan), 466 B.R. 460, 464 (B.A.P. 8th Cir. 2012) (citing
Norwest Bank Neb., N.A. v. Tveten (In re Tveten), 848 F.2d 871, 875 (8th Cir. 1988))
8
  See In re Gagne, 166 B.R. 362, 363 (Bankr. D. Minn. 1993) aff'd in relevant part,
Gagne v. Bergquist, 179 B.R. 884 (D. Minn. 1994).
       First, the fact that § 550.37, Subd. 24 doesn’t specifically exempt employee
benefit plans that distribute limited partnership units to employees is not fatal to
the Debtor’s exemption claim; the statute specifically contemplates “similar” plans.
And as the Supreme Court has instructed – with regard to the federal exemption
statute dealing with nearly identical subject matter (11 U.S.C. § 522(d)(10)(E))9 –
that “[t]o be ‘similar,’ an IRA [or other unlisted plan] must be like, though not
identical to, the specific plans or contracts listed in § 522(d)(10)(E), and
consequently must share characteristics common to the listed plans or contracts.”10
The Court analyzed those characteristics as follows:

      The Bankruptcy Code does not define the terms “profitsharing,”
      “stock bonus,” “pension,” or “annuity.” Accordingly, we look to the
      ordinary meaning of these terms. A “profitsharing” plan, of course, is
      “[a] system by which employees receive a share of the profits of a
      business enterprise.” Profitsharing plans may provide deferred
      compensation, but they may also be “cash plans” in which a
      predetermined percentage of the profits is distributed to employees at
      set intervals. A stock bonus plan is like a profitsharing plan, except
      that it distributes company stock rather than cash from profits. A
      pension is defined as “a fixed sum ... paid under given conditions to a
      person following his retirement from service (as due to age or
      disability) or to the surviving dependents of a person entitled to such a
      pension.”

      The common feature of all of these plans is that they provide income
      that substitutes for wages earned as salary or hourly compensation.
      This understanding of the plans' similarities comports with the other
      types of payments that a debtor may exempt under § 522(d)(10)—all
      of which concern income that substitutes for wages. See, e.g., §
      522(d)(10)(A) (“social security benefit, unemployment compensation,
      or a local public assistance benefit”); § 522(d)(10)(B) (“a veterans'
      benefit”); § 522(d)(10)(C) (“disability, illness, or unemployment
9
   11 U.S.C. § 522(d)(10)(E) exempts a debtor's “right to receive. . . (E) a payment
under a stock bonus, pension, profitsharing, annuity, or similar plan or contract on
account of illness, disability, death, age, or length of service, to the extent reasonably
necessary for the support of the debtor and any dependent of the debtor. . . . ”
10
   See Rousey v. Jacoway, 544 U.S. 320, 329, 125 S.Ct. 1561, 1568 (2005).
         benefit”); § 522(d)(10)(D) (“alimony, support, or separate
         maintenance”). But the plans are dissimilar in other respects:
         Employers establish and contribute to stock bonus, profitsharing, and
         pension plans or contracts, whereas an individual can establish and
         contribute to an annuity on terms and conditions he selects. Moreover,
         pension plans and annuities provide deferred payment, whereas
         profitsharing or stock bonus plans may or may not provide deferred
         payment. And while a pension provides retirement income, none of
         these other plans necessarily provides retirement income. What all of
         these plans have in common is that they provide income that
         substitutes for wages.11

       As the italicized language indicates (in addition to the requirements
discussed below), to qualify as a “similar plan,” a plan must provide income that
substitutes for wages, and not necessarily as retirement or disability income.

        Here, the distribution of limited partnership units under the Plan and
distributions under the CSI Limited Partnership Agreement approximate wages in
several respects. Like wages, they reward employees for their service, with the
“ultimate goal being the promotion of greater employee loyalty and a general
enhancement of the working environment for Kwik Trip employees.” Page 8 of
the plan’s disclosure document specifically states: “The objectives of CSI are to
provide Securityholders [defined as any owner of a unit] with (1) cash flow from
the lease of Properties it acquires and develops and (2) the opportunity to
participate in the increase in equity . . . of Properties being acquired and developed
. . . .” Moreover, the limited partnership units are taxed as wages in the period in
which they are received. And the redemption of an employee’s units upon
termination or retirement likely replaces or supplements an ex-employee’s wages.

       Quite simply, if a stock bonus plan can be a substitute for wages, then so can
the Kwik Trip Plan. The limited partnership units give the employee the
possibility of a tangible financial benefit – just like a stock bonus plan. And the
fluctuation in value of the partnership units would be no different than with a stock

11
     See id. at 544 U.S. 331 (emphasis added).
bonus plan. Thus, the Kwik Trip Plan is similar to the plan types specifically
mentioned in the statute—particularly stock bonus plans.

      Second, the Debtor’s “right to receive present or future payments” or
“payments received” must be on “account of illness, disability, death or length of
service.” We conclude that it is.

       Under the Benefit Plan, the Debtor’s employer, Kwik Trip, purchases
enough Partnership units “once per year for immediate distribution to employees
who meet certain eligibility criteria . . . discussed below under ‘Eligibility.’ ”
Eligibility is defined as follows:

      Eligibility. The Partnership Agreement permits Units to be awarded
      only to persons who, at the time of such award, are full-time or part-
      time Employees of Kwik Trip. . . . Under the current criteria, Eligible
      Employees are those who are full time employees as of the end of
      Kwik Trip's fiscal year for which the award is made, and who have
      completed at least five (5) continuous years of employment as of such
      date. Such employment must be continuous, however; it may include
      periods of part-time employment. For management employees (as
      defined by the Committee), the minimum employment period is two
      (2) years.

      Thus, the right to payment under the Benefit Plan, i.e., the right to receive
Limited Partnership units, is unambiguously on account of “length of service.”

      The Trustee argues that distribution of profits and losses to the limited
partners of CSI are not rights to payment on account of the listed factors. That is
true with regard to the distribution of profits under the CSI Limited Partnership
Agreement. Those distributions are, indeed, made “on account” of the profitability
of the Limited Partnership. But the same would be true of the distribution of
dividends to shareholders of a corporation where the shares were received under a
stock bonus plan. It is also true under an exempt profitsharing plan, which the
Supreme Court described as “[a] system by which employees receive a share of the
profits of a business enterprise.” Moreover, although the gross amount of a cash
distribution CSI unit holders might hinge on the profitability of CSI, the Debtor’s
share of any distribution of profits is directly related to the number of limited
partnership units she owns, which in turn is directly related to the Debtor’s length
of service at Kwik-Trip.

      In any event, we believe the Trustee’s focus on the manner by which Debtor
may receive a distribution of profits or losses from CSI is misplaced. Instead, the
focus should be on what the Debtor has received or may receive under the
employee benefit plan itself—i.e., the units of limited partnership. The Kwik Trip
employee benefit plan distributes limited partnership units to employees of Kwik
Trip. Those limited partnership units are precisely what Debtor has claimed as
exempt in her bankruptcy case.

       In sum, we conclude that the Kwik Trip Benefit Plan is similar to the plans
listed in Minn. Stat. § 550.37, Subd. 24, and the right to payments thereunder are
on account of the Debtor’s length of service at Kwik Trip. Therefore, the Debtor
may properly claim her interests in the limited partnership units distributed under
the Kwik Trip employee Benefit Plan as exempt.

                                 CONCLUSION
      For the reasons stated above, the decision of the bankruptcy court is reversed
and remanded to determine whether the amount of the Debtor’s interest in the
Partnership and Benefit Plan over the $66,000 statutory limit is reasonably
necessary for her support.
                        _____________________________
