(6th Cir. B.A.P. Apr. 26, 2016)
The B.A.P. holds that the recently-enacted Tennessee statute setting a higher interest rate for property tax claims in bankruptcy does not in fact determine the interest rate for such a claim in bankruptcy. Here, the property tax claim was oversecured, so interest could be paid on the claim pursuant to 11 U.S.C. § 506(b). Sec. 511 provides that the interest rate shall be determined by applicable nonbankruptcy law. The court holds that the Tennessee statute was a “bankruptcy law,” and thus the regular interest rate under Tennessee law applies. Opinion below.
Attorney for Government: R. Alexander Dickerson
Attorney for Debtor: Alexander Koval
Author: Matt Lindblom