Seaver v. New Buffalo Auto Sales (In re Hecker), 496 B.R. 541

Debtor Hecker owned Northridge, a Torrens-property home, with a first lien by U.S. Bank and second/third mortgages by GMAC; liens and tax claims left the property underwater (~$2.6M+).
Prepetition judgments were entered against Hecker by Koch Group and by New Buffalo/Wagener; Palladium later acquired Koch’s claim.
The New Buffalo/Wagener and Palladium judgments were not registered against Northridge pre-petition, so they were unsecured at bankruptcy filing.
U.S. Bank sought and obtained relief from the automatic stay to foreclose in Sept. 2009; the foreclosure sale occurred Jan. 19, 2010, with Northridge ultimately selling to U.S. Bank for $213,263 via credit bid.
The Trustee did not redeem during the stay/post-foreclosure period and later discovered irregularities in a $75,000 Thomas settlement; Northridge remained in Hecker’s name during redemption rights.
In Apr. 2010, GMAC’s second/third mortgages remained; the Judgment Creditors registered their judgments in April 2011, enabling a subsequent redemption by New Buffalo; the Trustee later sought to avoid those registrations under §549 and recover value under §550, while GMAC challenged the stay and its standing.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Stay violation by Judgment Creditors’ lien registrations	Trustee argues the estate retained interest; registrations violated stay	GMAC contends stay was violated and liens were void	GMAC’s stay-violation issue on appeal is not reached; GMAC dismissed for lack of standing
Remedy under §550 for the avoided transfer	Trustee seeks value of property transferred via registrations	Trustee cannot recover value since redemption had no value to estate	Trustee not entitled to damages; the estate suffered no recoverable value from registrations
Whether the Judgment Creditors’ registrations were void ab initio or voidable	Trustee seeks to recover windfall from creditors for their registrations	GMAC argues stay violation and invalid registrations	Court declined to void stay-related registrations; focus remains on remedy under §550

Seaver v. New Buffalo Auto Sales, LLC (In re Hecker), 459 B.R. 6 (8th Cir. BAP 2011) ( adopts Hecker I; discusses §549 avoidable transfer and remedies under §550)
Vierkant, 240 B.R. 317 (8th Cir. BAP 1999) (stay violations are void ab initio; major standing considerations)
Ahlers v. Norwest Bank Worthington (In re Ahlers), 794 F.2d 388 (8th Cir. 1986) (automatic stay provides creditor protection; standing)
Joing v. O & P Partnership (In re Joing), 61 B.R. 980 (Bankr.D.Minn. 1986) (redemption effect remains subject to liens; stay considerations)
Yukon Energy Corp. v. Brandon Inv., Inc. (In re Yukon Energy Corp.), 138 F.3d 1254 (8th Cir. 1998) (standing to appeal and aggrieved party standards in bankruptcy)
Soares v. Brockton Credit Union (In re Soares), 107 F.3d 969 (1st Cir. 1997) (discussion of stay violations and remedies)