N.C. Ct. of App.: Iris Enterprises v. Five Wins- Foreclosure Trustee Bound by Judicial Determination of Claim Balance


Following failed Chapter 11 bankruptcy, Five Wins obtained a declaratory judgment against Iris finding that Iris owed $894,711.24 to redeem real property from foreclosure. After Five Wins bid $875,000.00 for the properties, WA Ventures made a successful upset bid at the subsequent foreclosure in the amount of $918,750.00 and then assigned the bid to Five Wins. (It would be guessed that Five Wins bought the assignment of he bid rather than making another higher bid for the property at foreclosure.) The Trustee disbursed $856,286.33 to Five Wins for the remaining redemption amount and the remainder to Five Wins as part of the “secured obligation.” The trial court, on rehearing of the original declaratory judgment, awarded the remaining funds to Iris and Five Wins appealed.

The Court of Appeals held that the “redemption amount is the amount of the indebtedness.” And while the disbursements from a foreclosure “are within the sole province of the trustee[,]” In re Foreclosure of Deed of Trust Executed by Ferrell Bros. Farm, Inc., 118 N.C. App. 458, 461, 455 S.E.2d 676, 678 (1995), “the trustee of a property in foreclosure lacks authority to overrule a superior court judge.”


While the treatment of claims in a Chapter 13 bankruptcy is contingent upon the Debtor receiving a discharge, it is not necessarily true that the determination of the amount of a claim, including the disallowance of portions of a claim, i.e. pursuant to N.C.G.S. § 45-91, are contingent on a discharge. This case would support the contention that such determinations are binding.

For a copy of the opinion, please see:

Iris Enterprises v. Five Wins- Foreclosure Trustee Bound by Judicial Determination of Claim Balance


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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