Chapter 13 Plan: How to Really Get Rid of Unwanted Property … Or Maybe Not

HSBC Bank USA, N.A. v. Zair, 550 B.R. 188 (Bankr. E.D. N.Y. 2016)

The debtors proposed a chapter 13 plan that provided for surrendering real property to the first mortgagee, with title to the property vesting in the mortgagee over its objection. The bankruptcy court confirmed the plan and the mortgagee appealed. Continue reading

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Deemed Lease Rejection: Nothing Says That the Bankruptcy Code Must Make Sense

In re Hyegu Cho, 550 B.R. 152 (Bankr. D. Me. 2016)

A landlord moved for relief from the automatic stay in a chapter 13 case. It contended that the lease was a commercial lease that was deemed rejected because the deadline for assuming the lease had passed. The debtor argued that the applicable provision in section 365 of the Bankruptcy Code did not apply in a chapter 13 case.

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Mortgagor Claims: If At First You Don’t Succeed, Try, Try Again

In re Jepson v. Bank of New York Mellon, 816 F.3d 942 (7th Cir. 2016)

A creditor requested modification of the automatic stay so that it could proceed with a foreclosure action. The debtor opposed the motion and sought a declaration that the creditor had no interest in her mortgage. The bankruptcy court found in favor of the creditor, the district court affirmed, and the debtor appealed to the 7th Circuit. Continue reading

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Leases: Prebankruptcy Termination May Not Mean That the Landlord Is Out Of the Woods

Official Comm. of Unsecured Creditors v. T.D. Investments I, LLP (In re Great Lakes Quick Lube LP), 816 F.3d 482 (7th Cir. 2016)

A chapter 11 debtor relinquished 2 leases prior to filing bankruptcy. The unsecured creditors’ committee sought to avoid the lease termination transaction as a preference or a constructive fraudulent transfer. The bankruptcy court ruled against the committee and the district court affirmed, so the committee appealed to the 7th Circuit. Continue reading

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Recording Requirements: When “Duly Acknowledged” Is Not Enough

DeGiacomo v. First Call Mortgage Company (In re Reznikov), 548 B.R. 606 (Bankr. D. Mass. 2016)

A chapter 7 trustee sought to avoid a recorded mortgage based on a defective acknowledgment and then to preserve the lien of the mortgage for the benefit of the bankruptcy estate. The mortgagee objected – arguing that the acknowledgment was sufficient, and the debtor objected – claiming a homestead exemption in the property. Continue reading

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Bankruptcy Filing Veto: Better Follow the Playbook

In re Lake Michigan Beach Pottawattamie Resort LLC, 547 B.R. 899 (Bankr. N.D. Ill. 2016)

A mortgage lender moved to dismiss a chapter 11 bankruptcy case filed on the eve of foreclosure without the lender’s consent (in its role as a special member of the debtor) on the grounds that the case was filed in bad faith and the filing was not authorized. Continue reading

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Default Interest: There’s Prepetition Interest and Postconfirmation Plan Interest – Don’t Forget About What Happens in the Middle

Wells Fargo Bank, N.A. v. Beltway One Development Group, LLC (In re Beltway One Development Group, LLC), 547 B.R. 819 (9th Cir. BAP 2016)

A creditor objected to confirmation of a chapter 11 plan of reorganization because it did not include default interest for the period prior to the effective date of the plan. The bankruptcy court approved the plan over the creditor’s objections, and the creditor appealed to the 9th Circuit Bankruptcy Appellate Panel (BAP). Continue reading

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