Bankruptcy: Debtor's single asset is a commercial building
River East Plaza, LLC v. LNV Corp.
Court: U.S. 7th Circuit Court of Appeals
Docket: 11-3263Opinion Date: January 19, 2012
Areas of Law: Bankruptcy, Real Estate & Property Law
The debtor's single asset is a commercial building. The lender promptly started foreclosure proceedings in state court, prevailed, and a foreclosure sale of the property was scheduled, but was stayed when the debtor filed for bankruptcy, 11 U.S.C. 362(a)(4). The lender became a participant in the bankruptcy The bankruptcy court rejected the debtor's plan to exchange the mortgage for an "indubitable equivalent," lifted the stay, and dismissed the bankruptcy. The Seventh Circuit affirmed, noting that the lender has waited years to enforce its lien and that the court was not required to further stretch the wait. The lien on Treasury bonds proposed by the debtor would not be equivalent to the lender retaining its lien on the building.
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