On March 23, 2017, the bankruptcy lifted the automatic stay for Peak Leasing with regard to one of four trailers Mr. Price had obtain from Peak and took under advisement whether the remaining claims were “true leases” or disguised PMSIs. To determine such the bankruptcy court applied the UCC “Bright-Line” Test, which provides as follows:
A transaction in the form of a lease creates a security interest if the consideration that the lessee is to pay the lessor for the right to possession and use of the goods is an obligation for the term of the lease and is not subject to termination by the lessee, and:
(1) The original term of the lease is equal to or greater than the remaining economic life of the goods;
(2) The lessee is bound to renew the lease for the remaining economic life of the goods or is bound to become the owner of the goods;
(3) The lessee has an option to renew the lease for the remaining economic life of the goods for no additional consideration or for nominal additional consideration upon compliance with the lease agreement; or
(4) The lessee has an option to become the owner of the goods for no additional consideration or for nominal additional consideration upon compliance with the lease agreement.… Read More
The Farags (who were eventually represented by my law firm in their Chapter 13 bankruptcy- all statements in this posting are taken solely from the court decisions) obtained a line of credit in 2002 with Wells Fargo, secured by their real property. This was refinanced in 2004 by PNC, which, based on a pay-off statement from Wells Fargo, paid the balance owed and requested that the Deed of Trust be marked as satisfied and record. Wells Fargo failed to do so and the Farags continued to take advances from the line of credit totaling over $300,000.00.
Upon filing Chapter 13 on March 29, 2012, the Farags indicated that the real property would be surrendered.… Read More
Debtor’s Chapter 13 plan was confirmed cramming down the claim of Greater Piedmont Credit Union against mobile home and land, prior to the filing of the Proof of Claim by GPCU showing that title to the mobile home had been cancelled, affixing it to the real property. Within thirty days of confirmation and before the passing of the bar date for filing claims, GPCU filed a Motion pursuant to Rule 60(b) for relief from the Confirmation Order based on mistake.
The bankruptcy court held that to obtain relief under Rule 60(b)(1), GPCU was required to show:
(1) That the underlying motion was filed within one year of the date the Confirmation Order;
(2) That GFCU had a meritorious defense;
(3) That the Debtor would not be unfairly prejudiced by having the judgment set aside; and
(4) The existence of mistake, inadvertence, surprise, or excusable neglect as a ground for relief.… Read More
Ferguson Enterprises and People’s United Equipment Finance Corp. (formerly Financial Federal Credit Inc.) filed a joint motion to reopen the Debtor’s Chapter 11 case, seeking clarification and enforcement of a settlement agreement. In response, Blue Ridge Site Development asserted that the accounting in that settlement agreement was erroneous and Ferguson and People’s had been overpaid in the amount of $28,287.90. Ferguson and People’s then withdrew their motion to reopen and Blue Ridge itself then sought to reopen the case, seeking to have the accounting reviewed, partly on the basis of alleged lack of service of the original settlement.
The bankruptcy court found that Blue Ridge admitted it had received several bankruptcy notices during the case and was unpersuaded that the notices in question were not similarly received.… Read More
Dorothy Vogler died testate, with her debts exceeding the value of her real and personal property. Chris Vogler, the executor of her estate, initiated a special proceeding for the purpose of obtaining authorization to sell the real estate that Ms. Vogler had owned at the time of her death and to use the proceeds to pay her debts. Such sale was authorized and subsequently confirmed on January 12, 2011, with the Clerk authorizing payment of the costs of the proceeding and the remaining balance on the mortgage owed to Bank of America (“BOA”) on the real property. On January 18, 2011, however, BOA commenced its own foreclosure against the property.… Read More
Canovali-Relief from Chapter 11 Confirmation Order under Rule 60(b)Summary:
The Debtors had a two mortgage against their home, initially valued in the amount of $1,068,000.00, with Bank of America, a first with a balance of $988,000.00 and second with a balance of $368,000.00.
The Debtors proposed a Chapter 11 plan that recognized that there were two notes and Deeds of Trust, but that both such claims would be paid as a single claim secured in the amount of $1,000,000.00, payable with 5% interest over 30 years. The balance on the claims would be treated as unsecured.
Bank of America voted against the proposed Plan. … Read More