"Possessory interests" in personal property - property of the estate?
Posted: Thu Oct 27, 2016 5:18 pm
I have posted about this matter previously. I have a CH 11 Debtor who is an
unsecured guarantor for an equipment loan between the Bank and the
principals of the Debtor. Bank wants to repo the equipment without relief
from stay since the Debtor is only an unsecured guarantor and the loan and
security agreement is between the principals and the Bank.
Bank has not yet filed a motion to lift the stay and has not repo'd yet. I
am making the following arguments to the Bank and want to hear your
thoughts/case law:
1) Since Debtor has directly made all payments on the loan so far (44 out
of 60) and has always had use of the equipment, then essentially there is a
lease between the Debtor and the principals for this equipment and so the
estate has an interest in that lease and equipment.
2) The Debtor has a possessory interest in the equipment by way of mere
possession and so the equipment is estate property and subject to the stay.
Under Idaho law, Statute 28-12-201 (attached) it would appear that a
written lease between Debtor and principals is not necessarily required in
order to be enforceable.
The equipment is necessary for the reorganization and I do not think relief
from stay would be granted, but I would like some opinions from the "firm"
on this issue. Also, if Bank does just go ahead and repo without court
approval, would I have grounds for a stay violation? Do I really have a
lease, and is possessory interest enough?
Holly Roark
Certified Bankruptcy Specialist*
*and Sports Lawyer*
holly@roarklawoffices.com **primary email address**
www.roarklawoffices.com
*Central District of California & District of Idaho* - Consumer Bankruptcy
Attorney
1875 Century Park East, Suite 600 Los Angeles, CA 90067
T (310) 553-2600; F (310) 553-2601
*By State Bar of California Board of Legal Specialization
I have posted about this matter previously. I have a CH 11 Debtor who is an unsecured guarantor for an equipment loan between the Bank and the principals of the Debtor. Bank wants to repo the equipment without relief from stay since the Debtor is only an unsecured guarantor and the loan and security agreement is between the principals and the Bank.Bank has not yet filed a motion to lift the stay and has not repo'd yet. I am making the following arguments to the Bank and want to hear your thoughts/case law:1) Since Debtor has directly made all payments on the loan so far (44 out of 60) and has always had use of the equipment, then essentially there is a lease between the Debtor and the principals for this equipment and so the estate has an interest in that lease and equipment.2) The Debtor has a possessory interest in the equipment by way of mere possession and so the equipment is estate property and subject to the stay.Under Idaho law, Statute 28-12-201 (attached) it would appear that a written lease between Debtor and principals is not necessarily required in order to be enforceable.The equipment is necessary for the reorganization and I do not think relief from stay would be granted, but I would like some opinions from the "firm" on this issue. Also, if Bank does just go ahead and repo without court approval, would I have grounds for a stay violation? Do I really have a lease, and is possessory interest enough?
The post was migrated from Yahoo.