Continuing Perfection: Does a Mortgage Lapse During Bankruptcy If State Law Would Otherwise Require Steps to Maintain Perfection?

River Parishes Dirt & Gravel, LLC v. BankPlus (In re Willow Bend Ventures, LLC), 603 B.R. 293 (Bankr. E.D. La. 2019) –

A lender’s secured claim was challenged on the basis that postpetition it failed to take steps required to maintain perfection of its mortgage as required by state law. The matter turned on whether section 108(c) of the Bankruptcy Code extended the deadline for taking those steps. Continue reading

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Mortgages in Foreclosure: Strategies Can Get Complicated, Particularly When Bankruptcy Is on the Horizon

In re Battershell, 603 B.R. 86 (Bankr. D. N.M. 2019) –

A chapter 13 debtor objected to a proof of claim filed by a junior mortgagee. The claim included an advance used to pay off a senior mortgage that was in foreclosure. The debtor sought to have the advance recharacterized as a purchase of the senior mortgage loan. The junior mortgagee responded that recharacterization would violate the prohibition on modifying rights of a holder of a mortgage secured by the debtor’s principal residence. Continue reading

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Default Interest: What Does the Plan of Reorganization Say?

UMB Bank, N.A. v Linn Energy L.L.C. (In re Linn Energy, L.L.C.), 927 F.3d 350 (5th Cir. 2019) –

A lenders’ agent sought a court order directing payment of postpetition default interest, contending that this was required by the terms of a confirmed plan of reorganization. The bankruptcy court denied the motion; the district court affirmed; and the lenders’ agent appealed to the Fifth Circuit. Continue reading

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Homestead Exemption: The Back Story Matters

In re Montgomery, 602 B.R. 352 (Bankr. S.D. Ohio 2019) –

The debtor claimed a homestead exemption in residential property. The chapter 7 trustee objected that the debtor was not entitled to the exemption because he lived in a camper located on the property and his grandson occupied the house. Continue reading

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Mortgage Defaults: What Is the Most Effective Path for Resolving Troubled Properties?

In re Big Dog II, LLC, 602 B.R. 64 (Bankr. N.D. Fla. 2019) –

A mortgagee sought relief from the automatic stay for cause on the grounds that (1) it was not adequately protected, and (2) the debtor did not have any equity in the property and the property was not necessary for an effective reorganization. Among other things, the debtor argued that there was an equity cushion that provided adequate protection. Continue reading

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Notice, Notice, Notice: When Is a Plan of Reorganization Not Binding?

In re Puchi Properties Inc., 601 B.R. 677 (Bankr. D. Ariz. 2019) –

A chapter 11 trustee filed a motion with the bankruptcy court seeking to enforce a confirmation order and to compel a tenant to comply with terms of the plan of reorganization. The bankruptcy court addressed both jurisdiction and confirmation issues. Continue reading

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Liquor License Sale Financing: Can a Creative Structure Save the Day?

Mitsuwa Corp. v Orama Hospitality Group, Ltd. (In re Orama Hospitality Group, Ltd.), 601 B.R. 340 (Bankr. D. N.J. 2019) – Continue reading

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