Summary:
The Court had previously entered a Consent Order that allowed Bank of America to proceed with foreclosure against some of the property of the estate and also appointed a Chapter 11 Trustee. TP subsequently filed a Motion to Set Aside or Modify the Consent Order allowing foreclosure. Shortly after his appointment, the Trustee also sought to amend the Consent Order on the basis that an adversary proceeding initiated by TP against BOA had merit and would be pursued by him; that if BOA were permitted to foreclose on property of the estate, it would be unjustly enriched and profit from illegal conduct; and that a discrepancy in platting for a certain property subject to the Consent Order would, if not resolved prior to sale, cause the property to be sold at a deflated price.
The Bankruptcy Court agreed with the Trustee that, in light of the alleged illegal acts by BOA, the circumstances that prompted the lifting of the stay had vastly changed and, if BOA were to sought termination of the stay following such allegations, such a motion would have been denied. Further, the modification of the Consent Order sought by the Trustee, viz. to allow him to liquidate the assets “in such a way that the value of the debtor’s estate is maximized” was ultimately in the best interest of BOA also.
For a copy of the opinion, please see:
TP, Inc.- Modification of Consent Order Terminating the Automatic Stay.pdf
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