§ 363

In re DeCelis

In an adversary proceeding, a trustee obtained a default order declaring that the transfer by defendant debtor to defendant co-owner of an interest in a house was void. After learning that the debtor and the co-owner acquired title to the subject property as tenants in common from the same grantors in a single deed, the trustee filed a motion to sell the property free and clear of the co- owner's interest pursuant to 11 U.S.C. § 363(f).
Ruling: 
Trusteecould not sell property free and clear of co-owner's interest absent co-owner's affirmative consent.
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In re CRI Inc.

The chapter 7 trustee filed a motion to sell assets free and clear of liens, encumbrances and other interests. The trustee proposed to sell the debtor's interest in a wholly-owned subsidiary, including its title to real estate.
Ruling: 
Trustee's motion to sell assets free and clear of liens granted over objection of debtor's attorneys.
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In re Signature Developers Inc.

A bankruptcy debtor developed a residential subdivision with a restriction providing that the debtor was the exclusive builder for improvements in the subdivision. The trustee moved pursuant to 11 U.S.C. § 363(f)(5) to sell certain lots in the subdivision to the mortgagee secured by the lots, free and clear of the builder restriction, and a creditor which purchased other lots subject to the restriction objected to the sale.
Ruling: 
Trustee could sell subdivision lots free and clear of restriction providing that debtor was the exclusive builder for the development.
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Lange v. Schropp (In re Brook Valley IV J.V.)

Appellee bankruptcy trustee brought an adversary proceeding against appellants, the principals of bankruptcy debtor partnerships, alleging that the principals breached fiduciary duties by secretly purchasing real properties of the debtor for their own benefit. The principals appealed the judgment in favor of the trustee entered in the Bankruptcy Court for the District of Nebraska.
Ruling: 
Principals of debtor who formed new entities which purchased debtor's properties at foreclosure sale without disclosure to court ordered to turn over excess proceeds and profits.
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Doolittle v. County of Santa Cruz (In re Metzger)

Plaintiff property owner sued defendants, a county, debtor, a development company, et al. The county and the State of California cross-complained. The owner sought a declaration that a 1992 Sale Order divested the property of the county's interest. The county sought a declaration that the Sale Order did not divest the property of its interest and an order remanding the matter to state court. Pending were cross-motions for summary judgment.
Ruling: 
Sale order issued without proper notice to county did not strip county of its interest.
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Peterson v. Lewis (In re Jenkins)

This matter was before the court after trial on the adversary complaint filed by the chapter 7 trustee of the estate of the debtor seeking, inter alia, to sell both the estate's interest and the interests of her co-owner siblings in certain real property in Chicago, Illinois.
Ruling: 
Trustee was denied authorization to sell property since trustee had not shown that benefit to estate of sale free of interests of debtor's co-owners outweighed any detriment to them.
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Sheppard v. Wells Fargo Fin. Leasing Inc. (In re Sheppard)

Debtor had filed a state court action against creditor. In that action, the creditor answered but did not file a counterclaim. It moved to dismiss that lawsuit with prejudice. When it became apparent that the creditor intended to go forward on its motion to dismiss, the debtor filed the instant emergency motion to stay the state court action. The state court nevertheless went ahead with the hearing and granted the motion to dismiss.
Ruling: 
Motion to dismiss by debtor in state court action against creditor with no counterclaim did not violate stay.
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In re Reese

Movant debtor filed a motion for authority to accept executory contracts for the sale of real and personal property and to sell real and personal property free and clear of liens pursuant to 11 U.S.C. § 363(b), a motion to approve an agreed order for the use of cash collateral, and a motion for authority to obtain secured credit under 11. U.S.C. § 364(b)(1). Respondent wife objected to the first two motions.
Ruling: 
Debtor's motion to accept executory contracts for sale of properties free of liens and over wife's objections since sales were fair and reasonable and in best interests of estate and creditors.
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In re Brooklyn Hosp. Ctr.

Chapter 11 debtor, a hospital and its affiliates, moved for an order, pursuant to 11 U.S.C. §§ 105(a) and 363(b), approving and authorizing the implementation of a key employee retention plan ("KERP") for the purpose of retaining key employees of the debtor. Two parties, the state nurses'association and the trustee, objected to the approval of the KERP.
Ruling: 
Motion to authorize implementation of a key employee retention plan ("KERP") was granted since the consideration received in exchange for the KERP payments served an important corporate interest.
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In re HHG Corp.

The bankruptcy court had previously approved a sale of the debtor's assets which included a library of video footage of a professional wrestling event. More than two years after entry of the sale order, movants alleged that they had an interest in the library of video footage and filed a motion to set aside the sale order.
Ruling: 
Motion to set aside sale order was denied since opportunity to object to order was waived and, thus, order had res judicata effect.
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