Tag: disinterest

N.C. Court of Appeals: In re Foreclosure of Cain- Appeal of Oral Orders and Substitute Trustee Fiduciary Duty to Borrower

Summary:
Ms. Cain granted a Deed of Trust against her home securing a mortgage note to Household Realty Corporation (“HRC”), which was first specially endorsed to Household Bank, but HRC later specially endorsed the not to Beal Bank, which, following Cain’s default, appointed Rogers, Townsend & Thomas (“RTT”) as substitute trustee to commence foreclosure. After the Cumberland County Clerk of Court allowed the foreclosure sale to proceed, Cain appealed to Superior Court and sent a Request for Admissions to RTT. RTT then was relieved as substitute trustee and commenced representing Beal Bank in the foreclosure suit. At that hearing, Cain presented an unfiled motion to dismiss the foreclosure due to a purported failure by RTT to respond to the Request for Admissions.… Read More

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Bankr. WDNC: In re Pacific Avenue, L.L.C- Requirement of Disinterestedness for Representation of Chapter 11 Debtor

Summary:

The Debtor sought to employ James McElroy & Diehl, P.A. (“JMD”), as counsel  under 11 U.S.C. §  327(a) for representation in various other matters, including litigation and other “future, discrete matters” in the bankruptcy cases.   Because JMD had received substantial compensation from two equity owners of the Debtor, who were also substantial creditors, the Court found that JMD could not be deemed to be disinterested as required under 11 U.S.C. § 327(a) and could not be approved.  Nor could JMD be approved under 11 U.S.C. §  327(e) for “a specified special purpose, other than to represent the trustee in conducting the case” as even that  more limited representation was within the scope of representing the Debtor.… Read More

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