464 B.R. 848
Bankr. D. Iowa2011Background
- Debtors own Country Inn and Suites hotels in Cedar Falls and Waterloo, Iowa, and filed voluntary Chapter 11 petitions.
- U.S. Bank moves to designate both proceedings as single asset real estate cases to trigger expedited stay-restructuring timelines.
- Debtors contend the hotels’ operations are multi-faceted and not a single asset real estate case under 11 U.S.C. § 101(51B).
- Court analyzes whether the real property constitutes a single asset; if so, expedited plan and payments under § 362(d)(3) would apply.
- The Court must determine if there is no substantial business conducted other than operating the real property and related activities.
- Court ultimately declines to designate the matters as single asset real estate cases.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the hotels qualify as single asset real estate under § 101(51B). | U.S. Bank asserts all three prongs are met. | Debtors contend active hotel operations preclude the single asset status. | Not a single asset real estate case; three-prong test not met. |
| If designated, whether the expedited stay provisions would apply to Debtors’ cases. | Designation would trigger § 362(d)(3) relief unless plan or payments are timely made. | Debtors argue designation is inappropriate given active operations. | Designation denied; no expedited stay mechanism applied. |
Key Cases Cited
- In re Scotia Pacific Co., LLC, 508 F.3d 214 (5th Cir. 2007) (three-prong test for single asset real estate applied)
- In re CBJ Dev., Inc., 202 B.R. 467 (9th Cir. BAP 1996) (hotels may be excluded from single asset real estate when operations are substantial)
- In re Whispering Pines Estate, Inc., 341 B.R. 134 (Bankr. D.N.H. 2006) (hotel operations can be sufficiently active to remove from single asset real estate)
- In re Kkemko, Inc., 181 B.R. 47 (Bankr. S.D. Oh. 1995) (expedited plan framework in single asset cases; purpose of § 362(d)(3))
- In re 5877 Poplar, L.P., 268 B.R. 140 (Bankr. W.D. Tenn. 2001) (assumed single asset real estate status; limited analysis on hotel context)
- In re Scarlet Hotels, LLC, 392 B.R. 698 (6th Cir. BAP 2008) (hotels may opt in to single asset real estate classification; not controlling for qualification)