In re Bender
562 B.R. 578
Bankr. E.D.N.Y.2016Background
- Debtor filed a second Chapter 13 case seven months after a prior Chapter 13 was dismissed for failure to make plan payments; § 362(c)(3)(A) therefore applies.
- NY Liens, secured creditor holding a tax-lien certificate on debtor’s real property, sought confirmation that the automatic stay terminated 30 days after the later filing by operation of § 362(c)(3)(A).
- Debtor did not seek an extension of the stay under § 362(c)(3)(B) and argued the § 362(c)(3)(A) termination should be limited to the debtor personally and the debtor’s non‑estate property.
- The central dispute: whether the 30‑day termination lifts the § 362(a) stay only as to the “debtor” (and debtor’s property) or as to any prepetition judicial/administrative action concerning a debt, property securing that debt, or a lease (regardless of estate status).
- The court heard differing majority/minority approaches in prior decisions and analyzed statutory text phrase‑by‑phrase to determine congressional intent and the proper scope of termination.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of § 362(c)(3)(A) termination | NY Liens: stay terminates as to prepetition actions against debt, collateral, or lease (allowing foreclosure to proceed) | Debtor: termination limited to the debtor and debtor’s property; estate property remains protected until lifted under § 362(d) | The stay terminates as to any judicial, administrative or other formal proceeding commenced prepetition that relates to a debt, property securing such debt, or a lease, regardless of estate vs. debtor property |
| Meaning of “with respect to any action taken” | NY Liens: covers continuation of prepetition judicial/administrative proceedings | Debtor: phrase should be read narrowly or differently | Court: “action taken” refers to continuation of prepetition formal proceedings; termination applies to those proceedings on day 30 |
| Effect of phrase “with respect to a debt or property securing such debt or … any lease” | NY Liens: focuses analysis on specific debt/collateral/lease, not estate/debtor categories | Debtor: statutory language should be read to protect estate property unless creditor obtains relief | Court: these phrases control; they apply to the specific debt, collateral, or lease irrespective of estate status |
| Role of phrase “with respect to the debtor” | Debtor: limits termination to debtor and debtor’s property | NY Liens: that phrase should not nullify the intervening clauses about debt, collateral, lease | Court: “with respect to the debtor” does not limit termination to debtor property; it does not override the statute’s focus on actions concerning debt/collateral/leases |
Key Cases Cited
- Witkowski v. Knight (In re Witkowski), 523 B.R. 291 (1st Cir. B.A.P.) (adopts majority view limiting termination to debtor and non‑estate debtor property)
- Scott‑Hood, 473 B.R. 133 (Bankr. W.D. Tex.) (interprets § 362(c)(3)(A) by reference to § 362(a) whole; departs from simple majority/minority labels)
- Paschal, 337 B.R. 274 (Bankr. E.D.N.C.) (construed “action taken” to mean continuation of prepetition formal proceedings)
- Daniel, 404 B.R. 318 (Bankr. N.D. Ill.) (analyzes effect of “with respect to the debtor” and rejects interpretations that render other clauses surplus)
- Reswick v. Reswick (In re Reswick), 446 B.R. 362 (9th Cir. B.A.P.) (advances the minority position that termination is limited to the debtor)