The Court granted the Chapter 11 creditor's motion to compel the debtor-in-possession to assume or reject a lease. The Court first agreed with the creditor that the agreement in question was, in fact, a lease under Missouri law, overruling the debtor-in-possession's objection that the agreement was something other than a lease. The Court then held that by filing the motion to compel before the expiration of the 120-day assumption period, the creditor had, in effect, tolled that period. The Court concluded that seven (7) days remained during which the debtor-in-possession could elect to assume or reject the lease, or could request that the Court extend the time for it to make that decision.
Debtors commenced an adversary proceeding seeking a determination that the Bank’s mortgage was void because the debtor-husband did not sign the mortgage on a homestead that was collateral for a business loan. Wis. Stats. § 706.02 states that both married persons must join in a conveyance. The bank responded that the mortgage it held was valid due to the “substitute requirements” contained in the statute, which allow extrinsic documents to prove the validity of a mortgage so long as there is intent on the part of the non-signing spouse to mortgage his interest in the property. The court found that no such intent was present. The court also rejected the bank’s argument that it would be inequitable to invalidate the mortgage, noting that the bank is a sophisticated entity and has the obligation to check the requirements of Wisconsin law.
The chapter 13 trustee opposed confirmation of plan which treated student loan creditor as separately classified creditor, arguing it unfairly discriminated against the other unsecured creditors. The court overruled the trustee's objection, finding the specific provisions of sec. 1322(b)(5) for the cure of arrearages and maintenance of regular payments on long term indebtedness applied and superceded the general unfair discrimination provisions of sec. 1322(b)(1).
The debtor, after filing a bankruptcy petition under chapter 13 and without obtaining court approval, entered into agreements, in which she believed she was refinancing the mortgages on her two residential properties. In reality, it was a scam and the agreements transferred her ownership interest in both properties, giving her only the right to occupy the properties as a tenant for a period of 1 year, with no option to re-purchase. The debtor, an elderly widow with a 9th grade education, commenced an adversary proceeding against defendants, seeking the return of her ownership interest in the properties. The court concluded that the debtor never understood what she was signing and found the transactions to have violated § 362(a)(3), as acts to obtain possession of property of the estate, and § 549(a), as a post-petition transfer not authorized by the court.
Debtor who obtained homestead property in violation of a due-on-sale clause does not impermissibly modify creditor's rights in violation of 11 U.S.C. section 1322(b)(2) in proposing to pay the arrearages on the mortgage debt through a Chapter 13 plan.