Tax Lien Foreclosures: Property Tax Collection Meets Fraudulent Transfers – Who Wins?

Hampton v. Ontario County, New York, 588 B.R. 671 (W.D. N.Y. 2018), 588 B.R. 671 (W.D. N.Y. 2018) –

The debtors sought to set aside prepetition property tax foreclosures as constructively fraudulent transfers. The bankruptcy court granted the government’s motion to dismiss on the grounds that the price paid at a tax foreclosure sale that was regularly conducted in accordance with state law was conclusively presumed to be “reasonably equivalent value” for the property. The debtors appealed to the district court. Continue reading

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Sales Free and Clear: The Devil Is in the Details

In re Bridge Assoc. of Soho, Inc., 589 B.R. 512 (Bankr. E.D. N.Y. 2018) –

The debtor filed a motion to sell a residential loft building free and clear of possessory rights of the occupants. The bankruptcy court determined that the occupants had statutory rights of possession that could not be stripped in a bankruptcy sale. Continue reading

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Construction Subcontractor Claims: Is a Subcontractor Merely a Creditor of a Creditor Without Standing?

In re Alliance Consulting Group LLC, 588 B.R. 169 (Bankr. S.D. Miss. 2018) –

A subcontractor sought to reopen a bankruptcy case so that it could assert an administrative expense claim for work it did on a chapter 11 debtor’s facility. The bankruptcy court determined that the subcontractor did not have standing, and even if it did, the subcontractor did not establish cause to reopen the case. Continue reading

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Liquor License Sales: Who Gets the Money?

In re Aqua Pesca, LLC, 588 B.R. 241 (Bankr. D. Alaska 2018) –

A chapter 7 trustee sought bankruptcy court authorization to distribute proceeds from the sale of a liquor license. The trustee proposed to distribute proceeds pro rata to creditors with “holds” against the license as contemplated by state regulatory requirements as opposed to distribution strictly in accordance with the priorities set forth in the Bankruptcy Code. Continue reading

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Mortgage Loans: Beware Time Bars on Enforcing a Note or Mortgage

In re Eastman, 588 B.R. 600 (Bankr. D. Colo. 2018) –

A chapter 13 debtor objected to the proof of claim filed by a mortgagee. The primary issue was whether the applicable statute of limitations precluded recovery of delinquent payments that became due prior to acceleration of the debt. Continue reading

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Foreclosure Sales: When Does a Debtor Lose the Ability to Interfere with the Sale?

In re Vertullo, 593 B.R. 92 (Bankr. D. N.H. 2018) –

A mortgagee that sold a chapter 13 debtor’s home in a prepetition foreclosure auction but had not yet recorded a foreclosure deed sought relief from the automatic stay in order to evict the debtor. In the meantime, the debtor filed a plan that proposed to cure the prepetition mortgage defaults and continue payments. The bankruptcy court had to decide whether the mortgagee had completed the foreclosure sale within the meaning of the Bankruptcy Code and whether the debtor retained sufficient interest in the property to allow her to exercise a right to cure the mortgage defaults. Continue reading

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Foreclosure Procedure: Very Small Details Can Make A Very Big Difference

HSBC Bank USA, N.A. v. Crum, 907 F.3d 199 (8th Cir. 2018) –

A mortgagee brought an action in district court seeking to foreclose its mortgage. It filed a summary judgment motion that was granted by the district court. The debtor appealed, arguing among other things that the lawsuit was untimely. Continue reading

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