In re Lakeview Motor Inn, Inc.

167 B.R. 326 | D.R.I. | 1994

ORDER DETERMINING RECEIPTS AND RECEIVABLES TO BE PERSONALTY, AND NOT RENTS

ARTHUR N. VOTOLATO, Bankruptcy Judge.

Heard on April 25, 1994, on the Debtor’s emergency motion for the use of cash collateral, or in the alternative, for a finding that the Debtor’s occupancy income is not rents covered by Rhode Island Hospital Trust Na: tional Bank’s (“the Bank”) security interest. At issue is whether said receipts are personalty, and therefore subject to perfection as accounts receivable in accordance with the requirements of the Uniform • Commercial Code, as adopted in Rhode Island, R.I.Gen. Laws § 6A-9-101, et seq.

At the conclusion of the oral arguments we ruled, following what appears to be the majority view, that hotel and motel receipts are more closely akin to accounts receivable, than to rents or profits, and therefore are classified as personalty subject to perfection by the filing of a financing statement pursuant to Rhode Island’s Uniform Commercial Code, R.I.Gen.Laws § 6A-9-101, et seq. See Casco Northern Bank v. The Green Corp. (In re The Green Corp.), 154 B.R. 819 (Bankr.D.Me.1993); Investment Hotel Props., Ltd. v. New West Federal Savings and Loan Assoc. (In re Investment Hotel Props., Ltd.), 109 B.R. 990 (Bankr.D.Colo.1990); In re Oceanview/Virginia Beach Real Estate Assocs., 116 B.R. 57 (Bankr.E.D.Va.1990); 48 Bus.Law. 633, Donahue and Edwards, Treatment of Assignments of Rents in Bankruptcy: Emerging Issues relating to Perfection, Cash Collateral, and Plan Confirmation, (Feb. 1993). In so ruling, we specifically reject the holding and rationale of In re S.F. Drake Hotel Assocs., 131 B.R. 156 (Bankr.N.D.Cal.1991), aff'd, 147 B.R. 538 (N.D.Cal.1992), relied upon by the Bank.

Also at the hearing, however, another issue arose concerning the actual use being made of the subject property, in this ease. Accordingly, the matter is continued to May 11, 1994, at 9:30 a.m., for an evidentiary hearing as to the specific use and manner in which the subject property is occupied and paid for, together with the Bank’s already scheduled Motion for Relief from Stay. The Court will also determine, prior to the commencement of the hearing, whether it will conducts view of the subject property.

Enter Judgment consistent with this opinion.