Manufactured Home Lien: Forget Perfection, You Need To Have A Lien In The First Place

Morris v. Ark Valley Credit Union (In re Gracy), 522 B.R. 686 (Bankr. D. Kan. 2015) –

A chapter 7 trustee sought to avoid a credit union’s security interest in a manufactured home by asserting his strong arm powers as a hypothetical lien creditor based on the lender’s failure to perfect its lien. The bankruptcy court declined to avoid the lien since it held there was no lien to avoid. Continue reading

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Lost Mortgage Notes: Those Pesky State UCC Variations

Desmond v Raymond C. Green, Inc. (In re Harborhouse of Gloucester, LLC), 523 B.R. 749 (1st Cir. BAP 2014) –

A Chapter 7 trustee objected to the proof of claim filed by a downstream assignee of a lost mortgage note.  The trustee sought both to reject the claim and to avoid the mortgage (so that he could preserve the mortgage lien for the benefit of the estate).  The bankruptcy court held for the trustee with respect to the note and for the mortgagee with respect to the right to enforce the mortgage.  Both parties appealed. Continue reading

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Lease Claims: You Snooze, You Lose

In re Sky Ventures, LLC, 523 B.R. 163 (Bankr. D. Minn. 2014) –

After a debtor obtained court approval to retroactively reject a lease as of the bankruptcy filing date, the landlord moved to reset the rejection date and for allowance of an administrative expense priority claim for post-petition rent. Continue reading

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Mortgage Notes: Those Nasty Assignments!

In re Baber, 523 B.R. 156 (Bankr. E.D. Ark. 2014) –

The debtors objected to a proof of claim filed on behalf of a mortgagee based on issues arising from assignment of the mortgage note by the lender that originated the loan.  The mortgagee responded by, among other things, challenging the standing of the debtors to raise these issues. Continue reading

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Environmental Liability: Relief Through Bankruptcy Or Not?

In re Appalachian Fuel, LLC, 521 B.R. 779 (Bankr. E.D. Ky. 2014) –

A state department of environmental protection (DEP) filed an administrative expense application in the bankruptcy cases of coal mining debtors for reclamation costs and penalties for postpetition environmental violations.  After the initial ruling of the bankruptcy court was affirmed in part and vacated in part, the bankruptcy court addressed on remand (1) the liability of one of the debtors in connection with permits held by another debtor, and (2) whether the DEP claims should be given administrative expense priority. Continue reading

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Sale Orders: Ignore at Your Peril, Even After the Bankruptcy Case is Closed

Bombart v. The Family Center at Sunrise, LLC, 520 B.R. 300 (S.D. Fla. 2014) –

The owner of assets purchased in a bankruptcy sale sought to reopen a closed bankruptcy case to obtain an order enjoining the owner of the debtor entities from pursuing state litigation requesting relief in contravention of the sale order.  The bankruptcy court agreed and ordered the owner of the debtors to withdraw the state court claims.  The debtors’ owner appealed. Continue reading

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Substantive Consolidation: When Abuse Goes Too Far An LLC Will Not Shield Assets

In re Carroll, 520 B.R. 491 (Bankr. M.D. La. 2014) –

A chapter 7 trustee sought to substantively consolidate the bankruptcy estates of individual chapter 7 debtors with the separate bankruptcy estate of their wholly owned limited liability company (LLC).  Only the debtors, and none of the creditors, objected to substantive consolidation. Continue reading

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