Seelen v. Couillard (In re Couillard), 486 B.R. 466 (Bankr. W.D. Wis. 2012) –
“Whether one is baking a cake, building a house, or recording a mortgage, sometimes even the slightest deviation from the directions can lead to catastrophe. Cakes don’t rise, buildings fall down, and … mortgages aren’t perfected.” So starts the opinion in Couillard. Continue reading
In re Aida’s Paradise, LLC, 45 B.R. 806 (Bankr. M.D. Fla. 2013) –
A chapter 11 debtor sought to equitably subordinate a lender’s unsecured deficiency claim based on actions that it claimed interfered with operation of its property. The lender responded that it was merely exercising its rights under the loan documents to protect its investment. The court denied the lender’s motion to dismiss, finding that the debtor’s allegations were sufficient to state a plausible claim for relief. Continue reading
A deed of trust defined the secured indebtedness as a note and related documents, together with future advances. “Note” was defined as “the promissory note dated September 7, 2005, in the original principal amount of $675,000 from Grantor to Lender.” The note was actually dated September 8 (vs. 7). After filing a chapter 11 bankruptcy proceeding, the debtor brought an adversary proceeding against the lender claiming that the deed of trust was invalid and unenforceable because it referenced a note dated September 7, 2005, when no note of that date existed. Mortgages have been avoided for less. Continue reading
In re 18 RVC, LLC, 45 B.R. 492 (Bankr. E.D.N.Y. 2012) –
A chapter 11 debtor proposed to place a mortgagee’s deficiency claim into a separate class from general unsecured claims so that the deficiency claim could not prevent the unsecured class from accepting a proposed plan of reorganization. The debtor argued that separate classification was justified by the fact that the mortgagee had the benefit of a guaranty from the debtor’s principal. Continue reading
Horizons A Far, LLC v. Richard Webber (In re Soderstrom), 484 B.R. 874 (M.D. Fla. 2013) –
The debtors (Soderstroms) owned 50% of Plaza N 15 Partners, LLC. The bankruptcy trustee (Webber) proposed to sell the debtors’ interests in the limited liability company, and the owner of the remaining 50% (Buono) objected. The issue was whether the trustee could sell the entire interest including management rights, or just the debtors’ economic interests in the LLC; and as the case developed, whether the trustee could cause 100% of the interests to be sold. The bankruptcy court held that only a 50% economic interest could be sold, and a creditor (Horizons A Far) that was interested in buying the LLC interests appealed. Continue reading
Road & Highway Builders, LLC v. United States, 702 F.3d 1365 (Fed. Cir. 2012) –
A secured junior lender who purchased property at a senior lender’s foreclosure sale paid $100,000 to the Internal Revenue Service to induce it to release a right of redemption in connection with its tax liens on the property. After a bankruptcy court held that the junior lender had priority over the IRS but would not address the settlement payment, the junior lender sued the IRS in the U.S. Court of Federal Claims. It sought return of its $100,000 settlement payment, arguing that the settlement was void for lack of consideration. Continue reading
Bankruptcy-RealEstate-Insights 