Khan v. Regions Bank (In re Khan)
- Summarized by Dean Langdon , DelCotto Law Group PLLC
- 11 years 2 months ago
- Citation:
- File Name 13a0941n.06; Docket No. 12-6567
- Tag(s):
-
- Ruling:
- In an opinion not recommended for publication, the Sixth Circuit Court of Appeals affirmed the ruling of the District Court for the Eastern District of Tennessee finding the Chapter 7 debtor was not a "person aggrieved" by the Bankruptcy Court's dismissal of her adversary action seeking to invalidate a proof of claim and attendant lien filed on behalf of Regions Bank.
- Procedural context:
- The Chapter 7 debtor ("Khan") filed an adversary action seeking to have a deed of trust in favor of Regions Bank declared invalid under sections 502(b)(1) and 506(d) of the Bankruptcy Code. Regions Bank moved to dismiss for lack of subject matter jurisdiction, alleging Khan had no standing absent a surplus of assets in the estate. The Bankruptcy Court agreed and dismissed the adversary. Khan appealed to the District Court, which held she had no standing to appeal as she was not a "person aggrieved" by the Bankruptcy Court ruling. Khan timely appealed the District Court's ruling.
- Facts:
- Khan and her ex-husband entered into a line of credit agreement with Regions Bank in August, 2006, secured by a deed of trust against real property in Knoxville, Tennessee owned by the Rafia N. Khan Irrevocable Trust. The validity of the bank's lien was the subject of state court litigation prior to Khan's bankruptcy filing in December, 2010. Regions Bank filed a claim and Khan responded with an adversary action seeking to invalidate the bank's deed of trust under sections 502 and 506 of the Bankruptcy Code, arguing she had equity in her home and the ability to seek disallowance of the bank's claim rose to the level of an "interest". Regions Bank's motion to dismiss argued that absent a surplus of assets in the bankruptcy estate, she had no standing to seek disallowance of the bank's claim. The Bankruptcy Court agreed, finding that a Chapter 7 debtor in a no asset case had no standing to pursue the relief sought by Khan.
- Judge(s):
- Rogers, Cook and Van Tatenhove, District Judge. Opinion by Van Tatenhove.
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!