Maxwell Real Estate Investment, LLC v. Liberty Asset Management Corp. (In re Asset Management Corp.)

Case Type:
Case Status:
CC-16-1273-FCTa (9th Circuit, Mar 21,2017) Not Published
BAP for 9th Circuit affirmed ruling of bankruptcy court denying motion for relief from stay because movants did not need relief from stay to prosecute claim in bankruptcy court. While creditor sought remand of removed action to prosecute counterclaims to debtor's claims, creditor's motion for relief from stay requested alternative relief to prosecute counterclaims in either state court or bankruptcy court. BAP ruled that because creditors do not need relief from stay to prosecute claims in bankruptcy court, including in related adversary proceeding, bankruptcy court properly denied motion.
Procedural context:
Creditors moved for relief from stay, and bankruptcy court denied motion. Creditors appealed to BAP for 9th Circuit.
Creditors ("Maxwell Defendants") loaned "Liberty" $5.4 million. Liberty misused funds, and Maxwell Defendants demanded return of funds. Liberty agreed to repay loan with interest, including by conveying several parcels of real property that Maxwell Defendants could sell to pay down debt. After sale of properties, Liberty still owed over $1.4 million. Parties entered into further agreement for transfer of additional property ("10th Street") to Maxwell Defendants for sale. After sale of 10th Street, Maxwell Defendants still claimed $490k; Liberty alleged Maxwell Defendants owed Liberty $2.5 million. Liberty sued Maxwell Defendants in state court, then filed bankruptcy under chapter 11. Maxwell Defendants counterclaimed in state court action. Liberty removed action to bankruptcy court. In response to bankruptcy court order to show cause why action should not be remanded to state court, Maxwell Defendants moved for relief from stay to prosecute counterclaims in either bankruptcy court or state court.
Faris, Clement, Taylor

ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!

About us in numbers

3511 in the system

3392 Summarized

5 Being Processed