Filed: Feb. 24, 2016
Latest Update: Feb. 24, 2016
Summary: ORDER ERIC L. FRANK , Bankruptcy Judge . AND NOW WHEREAS : A. On November 14, 2014 , the court confirmed the Debtor's Fifth Amended Plan, As Amended on November 5, 2014 ("the Plan"). B. The Plan established a process for the sale of the Debtor's farm property or a part thereof. C. On July 31, 2015 , pursuant to the Plan, the court entered an order approving the form of notice and the bidding procedures ("the Sale Procedures Order") for the auction of the farm property to be conducte
Summary: ORDER ERIC L. FRANK , Bankruptcy Judge . AND NOW WHEREAS : A. On November 14, 2014 , the court confirmed the Debtor's Fifth Amended Plan, As Amended on November 5, 2014 ("the Plan"). B. The Plan established a process for the sale of the Debtor's farm property or a part thereof. C. On July 31, 2015 , pursuant to the Plan, the court entered an order approving the form of notice and the bidding procedures ("the Sale Procedures Order") for the auction of the farm property to be conducted..
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ORDER
ERIC L. FRANK, Bankruptcy Judge.
AND NOW WHEREAS:
A. On November 14, 2014, the court confirmed the Debtor's Fifth Amended Plan, As Amended on November 5, 2014 ("the Plan").
B. The Plan established a process for the sale of the Debtor's farm property or a part thereof.
C. On July 31, 2015, pursuant to the Plan, the court entered an order approving the form of notice and the bidding procedures ("the Sale Procedures Order") for the auction of the farm property to be conducted by the Chapter 12 Trustee ("the Trustee").
D. Pursuant to the Plan and the Sales Procedures Order, the Trustee conducted an auction sale of the entire farm property ("the Property") on September 16, 2015.
E. Deepak Patel ("Patel") offered the highest bid at the auction, $1.75 million.
F. On September 18, 2015, the court entered an order confirming the sale of the Property to Patel ("the Sale Confirmation Order").
G. On September 21, 2015, the Debtor appealed the Sale Confirmation Order.
H. By order dated October 9, 2016, the district court affirmed the Sale Confirmation Order.1
I. Following the district court's October 9, 2015 order, no order staying the Sale Confirmation
Order was entered.
J. On October 16, 2015, the Trustee and Patel closed on the confirmed auction sale and the Trustee executed and delivered a deed to the Property to Patel.
K. Since October 16, 2015, the Debtor and her family have not vacated the Property and remain in possession thereof.
L. On October 29, 2015, the Trustee filed a Motion to Evict Debtor With Assistance of U.S. Marshal Service ("the Motion to Evict").
M. The Debtor filed a response to the Motion to Evict and disputes that the Trustee is entitled to any relief.
N. An evidentiary hearing on the Motion to Evict was held and concluded on November 30, 2016.2
* * * * * *
O. Initially, it is indisputable that, having transferred the bankruptcy estate's interest in the Property to Patel, the Trustee has no right of possession of the Property.
P. The Trustee asserts that, implicit in the terms of the Plan itself (proposed by the Debtor and confirmed by the court), is the requirement, upon closing of the auction sale provided for by the Plan and the transfer of ownership to the buyer, that the Debtor relinquish possession of the Property.
Q. Therefore, notwithstanding the bankruptcy estate's lack of any present ownership or possessory interest in the Property, the Trustee asserts that he may seek the Debtor's eviction from the Property as a remedy for what he characterizes as the Debtor's violation of the terms of her own chapter 12 plan.
R. The Trustee's position is without merit for the following reasons:
(1) Assuming arguendo that the Debtor's failure to vacate the Property constitutes a violation of the Plan, the Trustee lacks standing to seek the remedy for this asserted violation.3
(2) Even if the Trustee has standing to seek the Debtor's eviction and the Plan included an implicit requirement that the Debtor vacate the Property after the closing on an auction sale, the implied Plan provision was superseded by the express terms of the Sale Procedures Order and the Sale Confirmation Order, both of which contemplated the possibility that the Debtor might "hold over" and provided a different remedy to the purchaser.4
It is therefore ORDERED that:
1. The Eviction Motion is DENIED WITHOUT PREJUDICE to Patel's exercise, in a court of competent jurisdiction, of his rights under applicable nonbankruptcy law to obtain possession of the Property.
2. Pursuant to the Sale Confirmation Order, and to the extent not already provided therein, Patel is GRANTED RELIEF FROM THE AUTOMATIC STAY EFFECTIVE IMMEDIATELY PURSUANT TO 11 U.S.C. §362(d), to exercise his rights as provided in Paragraph 1 above.
