In
re Radden (Bankr. ED Va. 1983)
Bankruptcy Law
Facts:
Debtor bought a car and the note was assigned to GMAC. GMAC
repossessed the car prior to bankruptcy after default. GMAC notified
the debtor of their right to redeem the property and of a proposed
sale if they did not redeem. 2 days before the sale, the debtor
filed for Chapter 13. Debtor listed the car value as $2,700 and
balance due of $4,400.30. The plan proposed to pay GMAC in full up
to the value of the car plus interest at 5% per annum in monthly
payments of $89.68 over 36 months. The other portion is treated as an
unsecured claim to receive .70/$. Creditor seeks relief on lack of
adequate protection §361(d)(1), and that the property has no equity
and is not necessary for the debtor’s effective reorganization
§362(d)(2).
Issue:
Does GMAC have adequate protection? Can the debtor motion for a
turnover?
Holding:
Yes and Yes.
Analysis:
§362(g) places the burden on the debtor to show the property is
necessary for effective reorg. He needs the car to get to and from
work. It is necessary so relief cannot be granted under §362(d)(2).
Also, GMAC is adequately protected because they retain their lien on
the collateral and receive the amount of their allowed secured claim
and they will be adequately protected if the plan is effectively
consummated. GMAC hasn’t shown the debtor’s chances of
rehabilitation are remote. He has stable employment and is capable
of meeting the payments. He has reasonable likelihood of having the
plan confirmed. Debtor has all the rights of the trustee under
Chapter 7 or DIP under Chapter 11. Debtor may seek turnover under
§542(a) because he may use it in the ordinary course of business.
§363.
§542
elements: 1) entity has possession, custody, or control over
property, 2) the debtor may use the property pursuant to §363, and
3) the property has value or benefit to the estate. Adequate
protection is necessary for the turnover, and the debtor will 1)
procure adequate insurance on the property at time of recovering
possession, and 2) make monthly payments under the K w/ GMAC until
confirmation, then GMAC will be adequately protected and §361 and
362 will be satisfied.
---
Interested in learning how to get the top grades in your law school classes? Want to learn how to study smarter than your competition? Interested in transferring to a high ranked school?
No comments:
Post a Comment