Town Center Flats, LLC v. ECP Commercial II LLC (In re Town Center Flats, LLC)

(6th Cir. Mar. 7, 2018)

The Sixth Circuit affirms the bankruptcy court’s decision finding that the debtor had redeemed real property following a pre-petition foreclosure action. If the debtor could establish that it had not redeemed the property then its affiliate may have title to the property and the bank’s mortgage would no longer encumber the property. However, because Michigan law permits parties to extend the redemption period and the evidence supported a finding that the parties agreed to an extension and negotiated the redemption payment, the mortgage is still effective. Opinion below.

Judge: Cole

Attorney for Appellant: Robert N. Bassel

Attorney for Appellee: ECP Commerical II LLC

2018-03-07 – in re town center flats

Author: Matt Lindblom

In re Parker

(Bankr. E.D. Ky. Jan. 6, 2017)

The bankruptcy court sustains the creditor’s objection to confirmation of the Chapter 13 plan. The debtor filed her bankruptcy petition after the creditor obtained a judgment and order of sale with respect to the debtor’s residence, after the creditor was the successful bidder at the resulting foreclosure sale, but before the state court confirmed the foreclosure sale. The creditor argued the debtor was not permitted to cure the default through her plan. The court discusses 11 U.S.C. § 1322(c) and holds that the debtor may not cure the default through a plan after the “gavel comes down on the last bid.” Confirmation of the sale and the right of redemption do not affect the analysis. Opinion below.

Judge: Schaaf

Attorney for Debtor: DelCotto Law Group PLLC, Dean A. Langdon

Attorneys for Creditor: Goldberg Simpson, LLC, Stephen R. Solomon, Megan P. Keane

2017-01-06-in-re-parker

Author: Matt Lindblom

Schlarman v. Nageleisen (In re Nageleisen)

(Bankr. E.D. Ky. Mar. 6, 2015)

The bankruptcy court holds that the debtor’s right of redemption, following a postpetition foreclosure sale, is property of the estate. The debtor filed bankruptcy prior to the foreclosure sale of her real property. The court then granted stay relief (but not abandonment) to allow the foreclosure sale to proceed. No lienholders bid at the sale, and the property sold for $5,000, which was far less than the appraised value. The debtor than transferred the right of redemption to an entity she controlled. The trustee filed an adversary proceeding seeking a judgment declaring the right of redemption property of the estate. The court first determined under Kentucky law that the right of redemption did not arise prepetition but instead arose at the time of the foreclosure sale. Thus, it was not property of the estate at the time the petition was filed. The court then concluded that the right of redemption constituted proceeds of property of the estate (the real property) and thus under § 541(a)(6) it was now property of the estate. Opinion below.

2015-03-06 – schlaman v nageleisen

Author: Matt Lindblom