Secured Claims: MERS Strikes Again, Or Maybe Not

Tamir v. U. S. Trustee, 566 B.R. 278 (D. Me. 2016)

A chapter 11 debtor filed objections to proofs of claim filed by holders of his mortgage notes. He argued that the banks did not have secured claims because under state law they did not have standing to foreclose the related mortgages. After the bankruptcy court found in favor of the banks, the debtor appealed. Continue reading

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PACA Claims: Beware of PACA Trusts Providing Special Protection to Perishable Agricultural Commodities Sellers

S & H Packing & Sales Co., Inc. v. Tanimura Distrib., Inc. (In re Tanimura, Distrib., Inc.), 850 F.3d 446 (9th Cir. 2017)

Produce growers who sold to a debtor/distributor on credit sued a factoring agent that acquired accounts receivable from the debtor. They contended that the receivables were subject to a PACA (Perishable Agricultural Commodities Act) trust, and consequently as trust beneficiaries they were entitled to be paid by the factor out of the receivables proceeds. The district court ruled in favor of the factor, and the growers appealed to the Ninth Circuit. Continue reading

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Foreclosure Sales: Strong Arm Powers and the Subtleties of State Law

Weiss v. U.S. Bank, N.A. (In re Mularski), 565 B.R. 203 (Bankr. D. Mass. 2017)

A chapter 7 trustee sought to avoid a prepetition transfer of property resulting from a mortgage foreclosure sale. The mortgagee argued that the completed sale extinguished all of the debtor’s interest even though the foreclosure deed and related documents were not recorded until postpetition. Continue reading

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Secured Claim Cramdown: You Can Try Fighting, But Is It Worth It?

RGW Properties of Beaver County, Inc., 564 B.R. 489 (Bankr. W.D. Pa. 2017)

A Chapter 11 debtor sought confirmation of its plan of reorganization over the objection of its primary secured creditor. The mortgagee argued that (1) the property that was its collateral, which was acquired by the debtor in tax sales, was not even part of the bankruptcy estate, and (2) the cramdown payment terms in the plan could not be confirmed. Continue reading

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Chapter 13 Residential Mortgages: Anti-Modification Round 3

In re Hueramo, 564 B.R. 604 (Bankr. N.D. Ill. 2017)

A chapter 13 debtor proposed a plan that bifurcated an undersecured mortgage loan into a secured claim and an unsecured claim. The mortgagee objected and moved for relief from the automatic stay. Continue reading

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Chapter 13 Residential Mortgages: Anti-Modification Round 2

In re Addams, 564 B.R. 458 (Bankr. E.D. N.Y. 2017)

A lender holding a mortgage on a two unit structure occupied in part and rented in part by a chapter 13 debtor moved to dismiss the case. The lender argued that the debtor was unable to propose a confirmable plan because the debtor could not bifurcate the lender’s undersecured claim into a secured claim and unsecured claim. Continue reading

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First Residential Mortgages: Do Not Take Anti-Modification Protection for Granted

In re Birmingham, 846 F.3d 88 (4th Cir. 2017)

A chapter 13 debtor sued his lender requesting a declaration that his chapter 13 plan could modify the lender’s mortgage on his primary residence. The bankruptcy court granted the lender’s motion to dismiss; the district court affirmed; and the debtor appealed to the Fourth Circuit. Continue reading

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