Getting around negative cash flow rental by exchanging with 3rd Party 10% of the property for promise to pay 10% of expe
Posted: Thu May 16, 2013 11:08 am
I think you need to look and see if there is a due on sale clause. If this is the debtor's residence and a due on sale clause is given effect by the proposed transfer, the case will likely die.
d
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On May 15, 2013, at 3:00 PM, "Steven B. Lever" wrote:
> Are we to take it this is a Chapter 13?
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> If so, seems like a good idea to me as long as all is disclosed.
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> Steven B. Lever
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Alik Segal
> Sent: Wednesday, May 15, 2013 3:05 PM
> To: CDCBAA Listserv; NACBA BK; Chapter 11 Issues
> Subject: [cdcbaa] Getting around negative cash flow rental by exchanging with 3rd Party 10% of the property for promise to pay 10% of expenses.
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> Debtor has a house which is $259 ($4,500 - $4,759) cash flow negative.
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> We think the property is worth $720K. Debtor's daughter is willing to help. If Debtor gives her daughter 10% of the property in exchange for daughters obligation to pay 10% of the mortgage, the estate will be receiving positive cash flow from this property.
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> The transfer of 10% of the property could be done as an installment sale, wherein at confirmation title does not transfer, but only an executory contract is created.
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> The unsecured creditors win because they get a slice of this positive cash flow. If this property is abandoned, unsecureds derive no benefit from it.
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> Please comment.
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> Alik Segal
> Alik.Segal@gmail.com
> 310-362-6157
> California Central District
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