Monthly Archives: January 2013

Mortgage Legal Descriptions: When Is a “Boo-Boo” Fatal (Round 1)?

In re Thulis, 474 B.R. 668 (Bankr. W.D. Wis. 2012) – Typically an unrecorded mortgage will be void as against a bona fide purchaser under state law.  This in turn will allow an unrecorded mortgage to be avoided in a bankruptcy using … Continue reading

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Of Sales and Leases: Can a Bankrupt Landlord Sell Free and Clear of a Tenant’s Interest?

In re Zota Petroleums, LLC, 42 B.R. 154 (Bankr. E.D. Va. 2012) – Zota addresses the interaction between (1) a sale free and clear of interests under Section 365(f) of the Bankruptcy Code and (2) a tenant’s right to retain possession under … Continue reading

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Construction Claims: Trust Funds Can Go Poof

McDonald v. Little Limestone, Inc. (In re Powers Lake Construction Co.), 482 B.R. 803 (Bankr. E.D. Wis. 2012) – A typical trust fund statute provides that payments to a construction contractor are treated as funds held in trust until its … Continue reading

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Perfecting Manufactured Home Liens: Variations on a Theme

Kinzalow v. Clayton Bank & Trust (In re Value Investment Properties, LLC), 481 B.R. 403 (Bankr. E.D. Tenn. 2012) – Determining the priority of liens in manufactured homes owned by the debtor raised the standard question of how to classify … Continue reading

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Mortgagees Beware: Your Dragnet May Have a Hole In It

Peoples National Bank, N.A. v. Jones, 482 B.R. 257 (S.D. Ill. 2012) – In Jones, the district court reversed the bankruptcy court and held that a standard dragnet clause in a mortgage was not sufficient to secure an advance made by … Continue reading

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Bankruptcy Sale Offers: Highest Is Not Always Best

In re Diplomat Construction, Inc., 481 B.R. 215 (Bankr. N.D. Ga. 2012) – Is there an obligation to sell to the highest bidder in a bankruptcy sale?  In Diplomat Construction, the court approved a sale to a bidder that offered less … Continue reading

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Foreclosure: Will a Last Minute Sale Survive?

In re Cook, 481 B.R. 265 (Bankr. N.D.N.Y. 2012) – A couple of hours before the Cooks filed a chapter 13 bankruptcy case, their home was sold at a foreclosure sale as the final step in a foreclosure of the first … Continue reading

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