Woolsey v. Citibank, N.A. (In re Woolsey), 696 F.3d 1266 (10th Cir. 2012) –
A Chapter 13 plan proposed to strip off the lien of a junior residential mortgage that was totally underwater. The bankruptcy court sustained an objection to the lien stripping and denied confirmation of the plan. The district court affirmed, and the case went up to the 10th Circuit. The 10th Circuit reluctantly agreed – BUT… Continue reading
Wachovia Mortgage v Smoot, 478 B.R. 555 (E.D.N.Y. 2012) –
In Smoot, the bankruptcy court held that a totally underwater junior lien on a residential property could be “stripped off” in a Chapter 7 case – choosing to follow a Second Circuit case that addressed the issue in a Chapter 13 case. On appeal, the district court reversed, concluding that the mortgage lien could not be stripped off. Continue reading
In re Omega Optical, Inc., 476 B.R. 157 (Bankr. E.D.Pa. 2012) –
A bank filed a proof of claim in a bankruptcy that erroneously identified its claim as unsecured. After confirmation of a chapter 11 plan of reorganization that treated the claim as unsecured, the bank filed a motion to allow it to amend its proof of claim to reflect the fact that the claim was secured. Omega focused on the question of what it takes to extinguish a lien through a plan. Continue reading
In Marvel Cliff, an equipment vendor sold and installed security cameras and wireless internet access equipment together with related hardware at an apartment complex. The vendor filed UCC financing statements with the secretary of state’s office, but did not file fixture filings with the local county recorder’s office.
The mortgagee claimed that it had priority because the equipment vendor did not perfect by filing a county fixture filing, while the equipment vendor contended that it had properly filed and was entitled to priority based on its purchase-money security interest (PMSI). State law determines the nature and extent of a security interest in the debtor’s property. In this case, that meant the Uniform Commercial Code (UCC). Continue reading
Fed. Nat’l Mortgage Ass’n v. Village Green I, GP, 483 B.R. 807 (W.D. Tenn. 2012) –
Fannie Mae objected to a “cramdown” plan of reorganization, arguing that (i) the accepting class of creditors was artificially impaired, (ii) the modification of its rights under its loan agreement was not fair and equitable, (iii) the interest rate on its unsecured deficiency claim was not sufficient, and (iv) the debtor did not propose the plan in good faith based on its misrepresentations and submission of a series of unconfirmable plans. The bankruptcy court confirmed the plan, and Fannie Mae appealed. Continue reading
In re Mundy Ranch, Inc., 484 B.R. 416 (Bankr. D. N.M. 2012) –
In Mundy Ranch, a corporate debtor moved to sell real estate that it owned free and clear of interests under Section 363(f) of the Bankruptcy Code. A minority shareholder that had been seeking dissolution of the corporation and partition of its assets prior to the bankruptcy objected. Continue reading
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