In the Matter of Orso

In this appeal we decide whether, under the laws of Louisiana that establish exemptions from seizure, the proceeds of annuity contracts purchased by obligors to fulfill a personal injury settlement structured to comply with 26 U.S.C. �� 104(a)(2) and 130*fn2 are exempt from claims of creditors of the payee who is a debtor in bankruptcy. A divided panel of this court*fn3 concluded that our opinion in Young v. Adler*fn4 required it to hold the instant annuity payments are not exempt under the Louisiana exemption statute as it existed when bankruptcy proceedings were commenced, and that a post-petition, expressly-interpretive amendment of that statute could not be considered when ascertaining its meaning as of the date of filing for bankruptcy protection. A majority of the judges in active service voted to rehear the case en banc.*fn5 Disagreeing with the panel majority, we affirm the bankruptcy and district courts’ conclusion that the annuity payments in question are exempt from seizure, and thus exempt from claims asserted by Creditor-Appellant Valerie Canfield in Debtor-Appellee Paul William Orso’s bankruptcy proceedings.

I. FACTS AND PROCEEDINGS