495 B.R. 692
W.D.N.C.2013Background
- McCullough owns the property at 5004 Wilkinson Boulevard, Charlotte, NC, securing the note with a deed of trust to the Hornes.
- McCullough executed a promissory note for $247,500 in favor of the Hornes on March 24, 2005; payments were made through 2011, with a substantial default thereafter.
- Foreclosure proceedings were set for August 2, 2012, with sale scheduled for August 23, 2012; McCullough filed Chapter 13 the same day and a plan was confirmed September 14, 2012, paying little to the Hornes.
- Wilkinson Associates contemplated purchasing the property, but the contract was terminated; fair market value disputed: McCullough asserts approximately $327,200–$385,000, Hornes contend about $200,000.
- In November 2012, the secured claim value was ~ $255,847.30; on January 9, 2013, Hornes sought relief from the automatic stay, which the bankruptcy court granted on January 30, 2013, on adequate protection and equity grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Adequate protection under §362(d)(1) | McCullough contends stay relief was premature or unwarranted. | Hornes assert lack of adequate protection due to nonpayment and uninsured property. | No adequate protection; relief granted. |
| Equity in the property under §362(d)(2)(A) | There may be some equity supporting the stay. | Value does not exceed debt; no equity exists. | No equity; relief warranted. |
| Necessity of the property to an effective reorganization under §362(d)(2)(B) | McCullough does not argue necessity of the property for reorganization. | Not contested; property not required for reorganization. | Not necessary for reorganization; relief proper. |
| Abuse of discretion under In re Robbins factors | Robbins factors may weigh against stay relief. | Factors favor lifting stay to permit liquidation and efficiency. | No abuse of discretion; factors weigh in favor of relief. |
Key Cases Cited
- In re Robbins, 964 F.2d 342 (4th Cir. 1992) (abuse-of-discretion standard for lifting a stay; equilibrium of interests)
- In re Johnson, 960 F.2d 396 (4th Cir. 1992) (standards for reviewing bankruptcy court decisions on appeal)