2013 WL 1124411
Bankr. D. Colo.2013Background
- Chapter 7 Trustee seeks court authorization to sell vacant El Paso County land to Bank for $1,500, Bank holding a first lien.
- Property valued at $39,000; Bank’s deed of trust secures $40,181 in debt.
- Two junior judgment liens exist: Capital One Bank USA, NA ($2,000) and CACH LLC ($1,859.56).
- Trustee argues sale should be free and clear under 11 U.S.C. § 363(f) to avoid those liens.
- No objections were filed to the Motion; movant provided notice pursuant to L.B.R. 9013-1.
- Court denies the Motion, finding § 363(f) does not authorize the sale free and clear in this case.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 363(f)(1) authorizes sale free and clear | Trustee argues nonbankruptcy law permits such sale. | Bank/Trustee rely on applicable nonbankruptcy law for free-and-clear sale. | § 363(f)(1) not satisfied; narrowly interpreted; not applicable here. |
| Whether § 363(f)(3) authorizes sale free and clear | Trustee asserts aggregate liens value is exceeded by sale price. | Trustee contends purchaser (Bank) consent and sale price exceeds lien value. | Sale price does not exceed aggregate value of all liens; § 363(f)(3) not satisfied. |
Key Cases Cited
- Waldschmidt v. Smith (In re York), 43 B.R. 36 (Bankr.M.D.Tenn.1984) (motor vehicle title statute free of secured lender’s interest example)
- In re 222 South Caldwell Street, Ltd. Partnership, 409 B.R. 770 (Bankr.W.D.N.C.2009) (pure race recording statute impact on liens and sale)
- In re Dauphin Island Properties, LLC, 431 B.R. 626 (Bankr.D.S.C.2010) (changed circumstances or other nonmarket restraints on sale)
- Clear Channel Outdoor, Inc. v. Knupfer (In re PW, LLC), 391 B.R. 25 (9th Cir. BAP 2008) (interpretation of aggregate liens value under § 363(f)(3))