Fischer v. Great Western Bank (In re Fischer)

Fischer v. Great Western Bank (In re Fischer), No. 13-6043 (BAP 8th Cir. November 18, 2013)
The Eighth Circuit BAP affirmed the bankruptcy court's denial of debtor's motion for contempt against lender. The BAP found that the bankruptcy court's order simply approving the stipulation did not contain any any operative commands or direction upon the parties, and did not impose any time restriction upon lender's obligations under the stipulation. The BAP found no grounds for contempt absent a party's violation of a specific, unambiguous provision of a court order.
Procedural context:
Chapter 12 debtors filed a motion for contempt against bank asserting that bank violated terms of stipulation and court order approving stipulation by failing to timely file a notice of satisfaction of lien releasing security interest in cattle and present and future crops. Bankruptcy court denied motion and debtors appealed to BAP.
Prior to bankruptcy, Chapter 12 debtors obtained a loan for financing of farm operations and purchase of machinery. As a result, lender received a perfected security interest in debtors' crops, farm products, and livestock. After filing bankruptcy and confirming Chapter 12 plan, debtors defaulted on an obligation to pay real property taxes. After lender moved for post-confirmation relief, lender and debtors entered into stipulation whereby debtors would liquidate cattle and distribute proceeds to lender. In return, lender was to release its security interest in cattle and present and future crops. Stipulation failed to include provision setting time restriction for lender's release of liens. Bankruptcy court approved stipulation by order that merely approved stipulation, but did not adopt terms as an order of the court. Debtors complied with stipulation. Lender did not release lien until approximately three months passed, and not until debtors were unable to receive a loan because of lender's lien. After receiving demand from debtors to release lien, bank promptly filed lien releases. Debtors filed motion for contempt.
Federman, Kressel, Nail

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