Real Estate Purchase Agreement: Contract for Deed or Mortgage – It Makes a Difference

In re Edwards, 606 B.R. 356 (Bankr. E.D. Ark. 2019) –

A chapter 13 debtor proposed a plan that treated a contract for deed as a secured claim. The seller objected, contending that the contract was terminated prepetition so that the debtor had no interest in the property. Continue reading

Posted in Financing, Real Estate | Tagged , | Leave a comment

Documents Under Seal: The Word “Seal” on a Preprinted Form May Be More Than a Vestige of Times Gone By (a/k/a 20 Years Is a Long Time)

In re George, 606 B.R. 236 (Bankr. E.D. Pa. 2019) –

A chapter 13 debtor objected to the proof of claim filed by a lender asserting an unsecured claim based on the debtor’s guaranty. The debtor contended that the guaranty was unenforceable because the statute of limitations expired. Continue reading

Posted in Financing | Tagged | Leave a comment

Anti-Assignment Provisions: Restrictions on Transfer of Promissory Notes May Be More Enforceable Than You Might Expect

In re Woodbridge Group of Companies, LLC, 608 B.R. 201 (D. Del. 2019) –

The debtor objected to a creditor’s proof of claim on the grounds that transfer of the claim to the creditor was unenforceable against the debtor because it violated anti-assignment provisions in the applicable promissory notes and loan agreements. The bankruptcy court rejected the creditor’s argument that the anti-assignment provisions were unenforceable and sustained the objection (without prejudice to the right of the assignor to file a proof of claim). The creditor appealed to the district court. Continue reading

Posted in Financing | Tagged , | Leave a comment

Cash Collateral: What Does It Take to Address the Risk That Once Cash Is Used It Is Just Gone?

In re Tevoortwis Dairy, LLC, 605 B.R. 833 (E.D. Mich. 2019) –

A Chapter 11 debtor filed a motion to use cash collateral. The key question was whether there was adequate protection of the lender’s interest in the cash collateral. Continue reading

Posted in Financing | Tagged | Leave a comment

Discharge Injunction: Is a Billing Statement Disclaimer Enough to Avoid Contempt?

Roth v. Nationstar Mortgage, LLC (In re Roth), 935 F.3d 1270 (11th Cir. 2019) –

A chapter 13 debtor sought to reopen her case so that she could move for imposition of contempt sanctions against a mortgagee based on its willful violation of the discharge injunction. The bankruptcy court denied the motion. The debtor appealed and the district court affirmed. The debtor then further appealed to the 11th Circuit. Continue reading

Posted in Financing | Tagged | Leave a comment

Recovery of Avoided Transfers: Section 550 Run Amok (Again)?

Rajala v. Husch Blackwell LLP (In re Generation Resources Holding Co., LLC), 604 B.R. 896 (Bankr. Kan. 2019) –

After a consent decree avoiding the transfer of property from the debtor to a second entity, a chapter 7 trustee sought to recover from law firms paid by the second entity from proceeds of sale of the transferred property. Recovery turned on the meaning of “immediate transferee” under section 550(a)(2) of the Bankruptcy Code. Continue reading

Posted in Uncategorized | Tagged , | Leave a comment

Mortgage Legal Descriptions: To Avoid Litigation, Get It Right in the First Place

Ivy v. U.S. Bank N.A. as Legal Title Trustee for Truman 2016 SC6 Title Trust (In re Ivy), 604 B.R. 540 (Bankr. W.D. Ark. 2019) –

A chapter 7 debtor brought an adversary proceeding against a foreclosing lender seeking a bankruptcy court determination that the lender’s mortgage lien was void due to an incomplete legal description, or alternatively that it was voidable as a cloud on his superior title. This case turned on state law and exemption impairment rather than a typical trustee’s exercise of strong arm powers. Continue reading

Posted in Financing, Real Estate | Tagged , | Leave a comment