Tag: valuation

Bankr. E.D.N.C.: In re Sweeney- Accession to Property and Mobile Home Valuation

Summary:

This case involved a valuation duel between Ms. Sweeney and Ditech over a 1999 Horton Mirage II 24′ x 52′ mobile home, which all parties agreed was personal property.

At the valuation hearing. Ms. Sweeney testified both as to her belief that the property suffered from “extensive water damage” and general disrepair, having a value of $10,000-$11,000. Ms. Sweeney based this on the county tax value of $9,850.

Ditech presented Mr. Joseph Cordoni, who testified that based on a physical inspection of the mobile home and the National Appraisal System (“NAS”), finding the trailer to be in fair condition and deducting $6,331.00 for the removed wheels and estimated repair costs.… Read More

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Bankr. E.D.N.C.: In re Cooper – Valuation and Lien Seniority Determined as of Petition Date for Lien Strip

Summary:

The Coopers had a home equity line of credit with First Bank. They refinanced their home with AHMS, which directed First Bank to close the line of credit, but the closing attorney failed to do so. The Coopers subsequently drew the available funds from the line of credit and filed Chapter 13 bankruptcy, with First Bank owed approximately $90,000 and AHMS owed approximately $160,000 .

Extended litigation ensured between AHMS and First Bank, with a settlement ultimately providing that the lien of First Bank (at that point assigned to title insurance) would be subordinated to the AHMS lien.

The Coopers then sought to strip-off the lien of First Bank pursuant to 11 U.S.C.… Read More

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Bankr. W.D.N.C.: In re Eagan- Absolute Priority Rule in Individual Chapter 11; Valuation of Minority Interests

Summary:

Applying principles enunciated by the United States Supreme Court in Assocs. Commercial Corp. v. Rash, 520 U.S. 953, 117 S.Ct. 1879 (1997), the Bankruptcy Court also found that it was appropriate to apply a minority discount when gauging the fair market value of the Corporate Holdings. To hold otherwise would give the best interest of the creditors a “punitive effect” on the Debtor by requiring payment of more than the fair market value of the assets in order to retain them. Accordingly, the plan which proposed to pay $923,161 to general unsecured claims, opposed to the $653,845 liquidated value, satisfied the best interest test of§1129(a)(7)(A).… Read More

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E.D.N.C.: Gateway Bank & Trust v. Clarendon Holdings- Valuation for Surrendered Property in Dirt for Debt Plans

Summary:

In a “Dirt for Debt” Plan, the Chapter 11 Debtor’s proposed to surrender real property to Gateway. The Bankruptcy Court held that the proper basis for valuation for such tender was the fair market value standard, where Gateway had urged a liquidation value.

On appeal, the District Court held that while 11 U.S.C. § 506(a)(1) mandates use of the fair market or “replacement” value where the Debtor intends to retain the collateral for its own use, the same is not true where the Debtor intends to surrender the property. In such circumstance, “[w]here a plan shifts to the creditor the burden to sell, and hence the risk of loss or potential for gain”, the court should take into “account the loss of income a creditor may encounter prior to the sale or liquidation of the property” and also whether the potential for loss is greater.… Read More

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