Reno Snax Sales, LLC v. Heritage Bank of Nevada (In re Reno Snax Sales, LLC)
- Citation:
- In re Reno Snax Sales, LLC, (Reno Snax Sales, LLC v. Heritage Bank of Nevada) NV-12-1512-DKiCo, 9th Cir. B.A.P. (2013).
- Tag(s):
-
- Ruling:
- Heritage Bank was not required to comply with the notice provisions of N.R.S. 482.516 and Article 9 in order to assert a claim to recover any deficiency out of the Reno Snax sale proceeds, consequently, the bankruptcy court did not err in overruling the claim objection.
- Procedural context:
- Reno Snax Sales, LLC ("Reno Snax") appeals the bankruptcy court's order overruling its objection to the proof of claim filed by Heritage Bank of Nevada ("Heritage Bank"). The Bankruptcy Appellate Panel AFFIRMS.
- Facts:
- On Oct. 4, 2011, Reno Snax and Coffee & Coolers, Etc., Inc. ("Coffee & Coolers"), filed chapter 7 petitions. Trustee's were appointed who operated the businesses, postpetition. Both entities were co-obligors on debt owed to Heritage Bank, which the debt was secured by nearly all of their assets. Heritage filed proof of claims in each bankruptcy case.
Reno Snax insisted that Heritage Bank was required to comply with the notice provisions of N.R.S. 482.516 and Article 9 of the U.C.C., even though it was the Coffee & Coolers trustee who had taken possession of and sold the vehicles. The B.A.P. agrees with the bankruptcy court that N.R.S. 482.516 is inapplicable because Heritage Bank never repossessed the vehicles which fails the first of two triggers for notice requirements - repossession. N.R.S. 482.516 requires notice when there is (a) repossession and (b) a secured creditor disposing of the subject assets. Also, the Coffee & Coolers trustee is not a secured creditor because she has no pre-petition claim to property of the bankruptcy estate.
The issue was whether the bankruptcy court erred in overruling Reno Snax's claim objection. The B.A.P. held that it did not. Heritage Bank was not required to comply with the notice provisions of N.R.S. 482.516 and Article 9 in order to assert a claim to recover any deficiency out of the Reno Snax sale proceeds, consequently, the bankruptcy court did not err in overruling the claim objection. Accordingly, the B.A.P. affirmed the lower bankruptcy court.
- Judge(s):
- DUNN, KIRSCHER, and COLLINS, Bankruptcy Judges
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