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Wesley H. Hitchcock, Ch. 12, BK19-41570-BSK (Aug. 14, 2020)

After a trial on a creditor’s motion for relief from the automatic stay and the debtor’s objection to that creditor’s proofs of claim, along with a request for valuation and cramdown, the court granted the motion for stay relief because the debtor did not own nor did he have a leasehold or possessory interest in the secured real estate, and no justification was shown for extending the automatic stay to third parties.

While the debtor does not own the real estate and his discharge would not affect the creditor’s lien against the property pursuant to § 524(e), the court ruled on the valuation issues concerning the land in order to ascertain whether the debtor could develop a confirmable plan. After evaluating the testimony of each party’s expert witness, the court found the creditor’s valuation to be more reliable, resulting in the creditor being over-secured. The court therefore overruled the debtor’s objection to the creditor’s claims.

Because the debtor’s pending Chapter 12 plan was predicated upon the creditor’s claims being crammed down as under-secured, the court gave the debtor an opportunity to show cause why the case should not be dismissed for failure to propose a confirmable plan.

Friday, August 14, 2020
Judge Brian S. Kruse