(Bankr. E.D. Ky. Jan. 14, 2015)
The bankruptcy court grants summary judgment in favor of the mortgagees in this avoidance action. The debtor had executed a special power of attorney, with the intent of giving another individual the authority to purchase and grant mortgages on real property. The power of attorney was recorded and contained ambiguous language as to the extent of authority granted. The mortgages were properly recorded. The trustee sought to avoid the mortgages, arguing that the power of attorney did not grant the authority necessary to execute the mortgages. The court rejects the trustee’s argument. Because the mortgages were properly recorded, they provided the requisite notice. A non-party cannot raise the question of authority of an attorney-in-fact when the parties relying on the power have not made authority an issue. Opinion below.
Author: Matt Lindblom