Tag: adequate protection

Bankr. E.D.N.C.: In re Cooper- Adequate Protection Payments Only Required Where Use of Property Causes Depreciation in Interest

Summary:

Throughout extended litigation regarding the validity of a junior mortgage (there are more than 300 docket entries in this Chapter 13 case), a motion to dismiss filed by the trustee remained pending due to the inability to confirm a plan. After more then five years when the court determined both liens were valid in In re Cooper, but demoted lien of First American, the Debtors proposed a plan surrendering the property to the secured creditors, with the collateral to satisfy those claims and the $61,554.84 paid by the debtors to date being held by the trustee.

First American, the holder of the second mortgage, opposed confirmation arguing that the plan was unfair and not proposed in good faith, since it had received no payments.… Read More

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E.D.N.C.: BB&T v. Construction Supervision Services- Requirements for Super-priority Claim under § 507(b)

Summary:

BB&T held secured claim against property of the estate. During the initial Chapter 11, BB&T received $62,900 in adequate protection payments. When the case eventually converted and assets were liquidated, paying the secured claim of BB&T, it nonetheless sought a super-priority claim under 11 U.S.C. § 507(b) for its post-petition interest, costs and fees.

In order to hold a super-priority claim BB&T was required to show the following:

1. The adequate protection payments provided ultimately proved to be inadequate.
2. The creditor must have a claim allowable under § 507(a)[(2)by way of an administrative expense claim under § 503(b)).
3.… Read More

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