Abandonment of Real Property - Chapter 11 Individual Case
Posted: Tue May 11, 2010 9:15 am
Abandonment doesn't get debtor any further than the need for consent of
Sale through 363(f) needs"cause" tolimit 363(k) credit bid right of secured creditors. Can't think of a winning argument to strip first of right to credit bid note and hold property for appreciation, that is the bargain it made when it took first position on the property.
If have consent of first, then can use "administrative efficienty cause" argument that court should limit second's right under 363(k) since it would get nothing from Trustee's Sale and still particiates in debtor's plan as a general unsecured claim.
Law Office of Peter M. Lively * Personal Financial Law Center I
11268 Washington Blvd, Suite 203, Culver City, CA 90230-4647
Telephone: (310)391-2400 * (800)307-3328 * Fax: (310)391-2462
A-Bankruptcy-Attorney.com
Personal Financial Law Center II - Costa Mesa, CA
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To: cdcbaa@yahoogroups.com
Sent: Mon, May 10, 2010 11:30:20 PM
Subject: [cdcbaa] Abandonment of Real Property - Chapter 11 Individual Case
Facts: Chapter 11 Debtor (separated filed individually) has a short sale offer on the real property in which her estranged husband lives (not her principal residence). The sale price is such that the first is partially undersecured and the second wholly undersecured. There is no equity for the estate and there is no benefit to the estate in retaining the property, as HOA fees continue to accrue post petition.
Research: Clear Channel case gives rise to issue of selling the property free and clear without consent of the first and clear notice to the second to submit an overbid. Bidding procedures therefore must be approved. Realtors must be employed.
Question: If the Chapter 11 Estate wants to abandon the property because of its inconsequential value, to whom would the Chapter 11 Estate abandon the property? To the Debtor, who would be allowed to sell the property without court order? Still need court order if the court grants the abandonment motion? In the event of sale, rather than abandonment, does the estranged spouse need to consent to disposition of property, or is his execution of purchase agreement and escrow instruction gives rise to adequate consent?
Assistance is appreciated. Lou Esbin
Abandonment doesn't get debtor any further than the need for consent of both lenders for release of liens to allow title to pass to buyer; a standard short sale transaction.
Sale through 363(f) needs "cause" to limit 363(k) credit bid right of secured creditors. Can't think of a winning argument to strip first of right to credit bid note and hold property for appreciation, that is the bargain it made when it took first position on the property.
If have consent of first, then can use "administrative efficienty cause" argument that court should limit second's right under 363(k) since it would get nothing from Trustee's Sale and still particiates in debtor's plan as a general unsecured claim. Peter M. Lively, JD/MBALaw Office of Peter M. Lively * Personal Financial Law Center I11268 Washington Blvd, Suite 203, Culver City, CA 90230-4647Telephone: (310)391-2400 * (800)307-3328 * Fax: (310)391-2462 A-Bankruptcy-Attorney.comPersonal Financial Law Center II - Costa Mesa, CA
THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY TO WHICH IT IS ADDRESSED, AND MAY CONTAIN INFORMATION THAT IS PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE LAW. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT, OR THE EMPLOYEE OR AGENT RESPONSIBLE FOR DELIVERING THE MESSAGE TO THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION, DISTRIBUTION OR COPYING OF THIS COMMUNICATION IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY US IMMEDIATELY BY E-MAIL OR BY TELEPHONE. THANK YOU.
From: californiadebtreliefagency <Esbinlaw@sbcglobal.net>To: cdcbaa@yahoogroups.comSent: Mon, May 10, 2010 11:30:20 PMSubject: [cdcbaa] Abandonment of Real Property - Chapter 11 Individual Case
Facts: Chapter 11 Debtor (separated filed individually) has a short sale offer on the real property in which her estranged husband lives (not her principal residence). The sale price is such that the first is partially undersecured and the second wholly undersecured. There is no equity for the estate and there is no benefit to the estate in retaining the property, as HOA fees continue to accrue post petition.Research: Clear Channel case gives rise to issue of selling the property free and clear without consent of the first and clear notice to the second to submit an overbid. Bidding procedures therefore must be approved. Realtors must be employed.Question: If the Chapter 11 Estate wants to abandon the property because of its inconsequential value, to whom would the Chapter 11 Estate abandon the property? To the Debtor, who would be allowed to sell the property without court order? Still need court order if the court grants the
abandonment motion? In the event of sale, rather than abandonment, does the estranged spouse need to consent to disposition of property, or is his execution of purchase agreement and escrow instruction gives rise to adequate consent?Assistance is appreciated. Lou Esbin
The post was migrated from Yahoo.