All items from Bankruptcy-RealEstate-Insights

Bankruptcy Purchasers Beware: Do Not Take For Granted That Your Sale Will Be “Free and Clear”

In re Jaussi, 488 B.R. 456 (Bankr. D. Colo. 2013) – A chapter 7 bankruptcy trustee requested court approval of a sale of vacant land to a bank that held a first lien on the property, with the sale to be “free and clear” of the junior liens of two judgment creditors.  Sounds reasonable, right?  The […]



From Bankruptcy-RealEstate-Insights
Posted 3 days 2 hours ago

Defalcation and Dischargeability: The Supreme Court Speaks

Bullock v. BankChampaign, N.A., 569 U.S. ___ (2013) – Although an individual debtor can generally obtain a discharge of debts in bankruptcy as part of a “fresh start,” there are certain exceptions.  In particular, Section 523(a)(4) of the Bankruptcy Code provides that a debtor is not discharged from a debt “for fraud or defalcation while acting in […]



From Bankruptcy-RealEstate-Insights
Posted 1 week 2 hours ago

Discharge Injunction Violation: Can a Lender Refuse to Foreclose, Release Its Lien, or Accept Surrender of a Property?

Canning v. Beneficial Maine, Inc. (In re Canning), 706 F.3d 64 (1st Cir. 2013) – After filing a chapter 7 bankruptcy, the debtors tried to surrender their residence to the mortgage lender.  After the bankruptcy the lender refused to accept a surrender, refused to foreclose and refused to release its lien.  The debtors brought an adversary proceeding […]



From Bankruptcy-RealEstate-Insights
Posted 1 week 3 days ago

Proof of Claim: Itemization of Fees, Expenses, and Charges Means Itemization (or Else)

In re Jimenez, 487 B.R. 543 (Bankr. D. Colo. 2013) – A mortgage lender filed a proof of claim in a chapter 13 bankruptcy claiming total secured debt of $132,945.08, including $14,327.60 in prepetition expenses that were identified as $2,231.93 in late charges and $12,095.67 in attorney fees.  The debtors objected, claiming that (1) the lender failed to […]



From Bankruptcy-RealEstate-Insights
Posted 2 weeks 2 hours ago

363 Sales: Watch It – A Good Faith Deposit May Not Be As Reliable For Protection As You Thought

The Brown Publ’g Co. Liquidating Trust v. Brown Media Corp. (In re Brown Publ’g Co.), 486 B.R. 46 (Bankr. E.D.N.Y. 2013) - A stalking horse (BMC) was the winning bidder in a section 363 bankruptcy sale.  After the sale to BMC failed to close and the debtors’ assets were instead sold to a back-up bidder, BMC claimed [...]



From Bankruptcy-RealEstate-Insights
Posted 2 weeks 3 days ago

Environmental Claims: The Best Laid Schemes of Mice and Men …

Route 21 Associates of Belleville, Inc. v. MHC, Inc., 46 B.R. 75 (S.D.N.Y. 2012 – A company (Route 21) bought property from the debtor (MHC) in the mid-1980s that turned out to be contaminated.  After the debtor filed bankruptcy in 2009, Route 21 attempted to protect its rights against MHC by moving for specific performance of [...]



From Bankruptcy-RealEstate-Insights
Posted 3 weeks 2 hours ago

Escrow Funds: If You Aren’t Careful, Your Funds May Become Part of a Bankruptcy Estate

Quinlan v. AFI Services, LLC (In re AFI Services, LLC), 486 B.R. 827 (Bankr. S.D. Tex. 2013) – The debtor (AFIS) entered into a joint venture agreement with a third party (Quinlan) to acquire an apartment complex pursuant to a purchase agreement between the debtor and the seller.  Under the JV agreement, the debtor was supposed [...]



From Bankruptcy-RealEstate-Insights
Posted 3 weeks 3 days ago

Mortgage Errors: How Not to Correct a “Boo-Boo”

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. [...]



From Bankruptcy-RealEstate-Insights
Posted 4 weeks 2 hours ago

Equitable Subordination: Lenders Beware – It Is Not Enough That Actions Are Permitted Under the Loan Documents

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.  [...]



From Bankruptcy-RealEstate-Insights
Posted 4 weeks 3 days ago

The Continuing Saga of Mortgage Errors: Not All “Boo-Boos” Are Fatal

The Willows II, LLC v. Branch Banking & Trust Co. (In re The Willows II, LLC), 485 B.R. 528 (Bankr. E.D.N.C. 2013) – 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 [...]



From Bankruptcy-RealEstate-Insights
Posted 5 weeks 2 hours ago