Bankr. E.D.N.C.: In re SRCR, L.L.C.- Turnover of Airplane

Summary:

SRCR pledged a Piper Navajo Airplane as collateral for a loan to Park Sterling. After default on the loan, Park Sterling repossessed the airplane on February 3, 2012. SRCR filed a Chapter 11 bankruptcy on February 21, 2012. When Park Sterling refused to return the airplane, SRCR filed a Motion for Contempt and Park Sterling responded with a Motion for Relief.

The bankruptcy court began by holding that if a creditor refuses to turnover property that was repossessed prior to the petition date, the creditor must ensure that the issue of rightful possession is promptly placed before the court. Despite not filing its own Motion for Relief for several weeks, the bankruptcy court found that the debtor’s motion for contempt and sanctions and the response filed by Park Sterling placed the issue of rightful possession of the airplane before the court in a timely manner.

Park Sterling asserted that it was implausible to consider the airplane necessary for an effective reorganization of the SRCR, as SRCR business does not require air travel and the airplane was more of a personal luxury for the owner of SRCR, J. Keith Stark . Stark, however, testified that the airplane was necessary for the business operations of SRCR and its leasing of equipment to its sister corporations. SRCR further showed clear evidence that the vast majority of the airplane’s flights were for business purposes.

Accordingly, the bankruptcy court denied both the motion for contempt and the motion for relief, ordering that the airplane be returned to SRCR.

For a copy of the opinion, please see:

SRCR, L.L.C.- Turnover of Airplane.pdf

About

1. Bachelor of Arts degree in English Literature from Washington University, 1993. 2. Juris Doctor degree from George Washington University, 1996. Admissions to Practice of Law: North Carolina Bar, 1996. Federal District Courts for the Eastern and Middle Districts of North Carolina. Specialty Certification: North Carolina State Bar: Certified as a Specialist in Consumer Bankruptcy. Areas of Practice: Practice limited to consumer and business debtor bankruptcy law, 1998 to present. Memberships: National Association of Consumer Bankruptcy Attorneys (NACBA). North Carolina Academy of Trial Lawyers (NCATL). North Carolina Bar Association, Bankruptcy Section. Lectures prepared and presented: North Carolina Academy of Trial Lawyers seminar on bankruptcy; Topic: Counseling the Consumer Debtor Prior to Court - C.Y.A. Forms to Help 'Gird They Loins'; 2001. Middle District Bankruptcy Seminar; Topic: Preparing Chapter 13 Plans; 2002. NACBA National Convention; Topic: Efficient Office Practices; 2003. NACBA National Convention; Topic: Chapter 7 vs. Chapter 13 Debates; 2004. Middle District Bankruptcy Seminar; Topic: Chapter 7 & 13 Hot Issues; 2004. Positions held: NACBA National Convention; Convention Chair; 2008. NACBA National Convention; Panel Moderator: Topic: Basic Bankruptcy Issues; 2008. NACBA National Convention; Panel Moderator; Topic: Chapter 13-Disposable Income and Other Issues; 2007. NACBA National Convention; Panel Moderator; Topic: Representing Members of the Military and Their Families; 2007. NACBA, Member of National Board of Directors, 2006 to present. NCATL, Chair of the Bankruptcy Section, 2003 to 2007. NACBA, Chair of the North Carolina Section, 2003 to 2007. NC Bar Association, Bankruptcy Section, Bankruptcy Council Member, 2004 to present.

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