Defective Mortgages: Variations on a Theme

Harker v. PNC Mtg. Co. (In re Oakes), 581 B.R. 500 (6th Cir. B.A.P. 2018) –

A chapter 7 trustee sought to avoid a recorded mortgage with a defective acknowledgment using his strong arm powers. The bankruptcy court ruled in favor of the trustee, and the mortgagee appealed to the Bankruptcy Appellate Panel (BAP). Continue reading

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Interests Held by the Bankruptcy Estate: Can Contingent Interests Go Poof?

Reinbold v. Thorpe (In re Thorpe), 881 F.3d 536 (7th Cir. 2018) –

A chapter 7 trustee sought to avoid the interest of a debtor’s wife in property that was awarded to her in a state court divorce proceeding. This decision turned on the nature of the interest that became part of the bankruptcy estate. Continue reading

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Defective Mortgages: There Is Constructive Notice, and Then There Is Inquiry Notice

Kelley v. USAA Fed. Sav. Bank (In re Jones), 580 B.R. 916 (Bankr. M.D. Ga. 2017) –

A chapter 7 trustee sought to avoid a lender’s lien on property of the debtor. The recorded deed of trust was not signed by the borrower since it was missing a signature page. The trustee argued that as a consequence the document was not eligible to be recorded, and thus did not provide constructive notice of the lender’s interests. Continue reading

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UCC Terminations: An “Oops” Filing Can Be Fatal

Crop Production Services, Inc. v. Wheeler (In re Wheeler), 580 B.R. 719 (Bankr. W.D. Ky. 2017) –

A chapter 7 debtor was a farmer who obtained various loans for equipment and land and to put crops in the field. One of its lenders asserted a senior lien in the debtor’s crops and sought to avoid the lien of a competing lender. The case turned on the effect of an inadvertently filed UCC termination statement. Continue reading

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Chapter 13 Plan Forced Vesting: If There Is No Objection And A Plan Is Confirmed, The Matter Is Settled Whether The Law Is Or Not

In re Peterson, 581 B.R. 789 (Bankr. D. Md. 2018) –

A chapter 13 debtor confirmed a plan that provided for surrender of her condominium unit to secured creditors. After confirmation, the condominium association sought relief from the automatic stay to pursue collection action for post-petition assessments against both the condo and the debtor. The debtor did not object to the association pursuing its in rem rights but contended that she had no ongoing personal liability for assessments. Continue reading

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Manufactured Home Loans: Deciding Whether the Chapter 13 Anti-Modification Provision Applies Can Be A Vexatious Issue

The Paddock, LLC v. Bennett (In re Bennett), 584 B.R. 15 (8th Cir. B.A.P. 2018) –

The debtors proposed a chapter 13 plan that modified the rights of a creditor whose claim was secured by their manufactured home. The creditor objected on the grounds that its claim was covered by the prohibition on modifying a mortgage secured by a debtor’s principal residence. The bankruptcy court confirmed the plan and the lender appealed. Continue reading

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Bankruptcy Sales: A “Free and Clear” Sale Does Not Necessarily Mean That the Buyer Goes Scot-Free

In re Gawker Media LLC, 581 B.R. 754 (Bankr. S.D.N.Y. 2017) –

A purchaser of substantially all of the debtors’ assets sought to enforce the “free and clear” language in the bankruptcy court sales order by asking the bankruptcy court to require third parties to dismiss their state court claims against the purchaser. Continue reading

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