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Victor Kearney v. Unsecured Creditors Committee

Summarizing by Bradley Pearce

Ortega v. LSREF2 Island Holdings, LTD.

BAP NO. PR 14-067 (1st Cir. B.A.P. December 4, 2015)
The Bankruptcy Appellate Panel for the First Circuit affirmed the Bankruptcy Court's finding that it did not have jurisdiction over real property and that the automatic stay did not protect the real property when the real property was not owned directly by Ms. Ortega (the "Debtor"), but was owned by a probate estate in which the Debtor had an interest. In reaching its decision, the BAP considered whether the Debtor received rental income from the property, or had a right to possess the property; she had neither.
Procedural context:
Debtor's appeal from the bankruptcy court's decision denying LSREF2 Island Holdings, LTD's ("Island Holdings") motion for relief from the automatic stay to proceed with a foreclosure on the basis that the bankruptcy court did not have jurisdiction over the real property at issue.
The Debtor's parents owned real property in Puerto Rico which was subject to a lien in favor of Island Holdings. The Debtor's parents passed away and the property passed into probate, which remained unresolved at the time that the Debtor filed for bankruptcy. The Debtor held an interest in the probate.
Feeney, Deasy, Cary

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