Bray v. U.S. Bank National Assoc.
- Summarized by Camila Bersani , United States Bankruptcy Courts
- 4 months 1 day ago
- Case Type:
- Consumer
- Case Status:
- Affirmed
- Citation:
- CC-17-1373-SKuF (9th Circuit, Aug 07,2018) Not Published
- Tag(s):
-
- Ruling:
- Bankruptcy court did not commit a reversible error when it annulled the automatic stay nunc pro tunc to validate a postpetition nonjudicial foreclosure sale of real property where the debtor was part of a “fractional interest” scheme. Debtor lacked standing to appeal order reopening the case because the order was nonjurisdictional and did not have “independent legal significance.”
- Procedural context:
- Appeal to the Ninth Circuit Bankruptcy Appellate Panel from judgment of bankruptcy court granting motions to reopen case and to annul automatic stay.
- Facts:
- A chapter 7 involuntary petition was commenced against the debtor in June 2017. A secured creditor objected arguing the petition was filed in bad faith with for the purpose of hindering, delaying, and defrauding creditors. Debtor was allegedly part of a fractional interest scheme, where a borrower facing foreclosure transfers all or part of her ownership interest in real property to potential debtors. The Court dismissed the case and U.S. Bank moved to reopen a few months later seeking annulment of stay to validate a postpetition foreclosure sale. Bank provided evidence that in 2006, Mr. Horton borrowed $860,000 to purchase real property. After default, foreclosure sale was delayed due to multiple bankruptcies and transfers of fractional interests to various parties including the debtor, who received a 10% interest right before the involuntary petition was filed. Bankruptcy court granted the Bank’s motions to reopen and annual stay, and found that the involuntary petition was filed in bad faith.
- Judge(s):
- SPRAKER, KURTZ, and FARIS
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