Bankr. No.:
05-30175
Adv. No.:
05-3009
Chapter:
12
Date of Decision:
June 26, 2007
Issue:
(1) Whether plaintiff was entitled to summary judgment permitting it to record a mortgage that was not recorded on the date debtors-defendants filed their chapter 12 petition? (2) Whether plaintiff was entitled to summary judgment granting it an equitable lien against the real property described in its unrecorded mortgage?
Ruling:
(1) No. Plaintiff did not request, or demonstrate cause for, relief from the automatic stay. Plaintiff also did not identify a “generally applicable law” within the meaning of 11 U.S.C. § 546(b)(1) and (b)(1)(A), or demonstrate any such generally applicable law would permit perfection of its mortgage to be effective against an intervening creditor. (2) No. There is some question whether a court may recognize, much less grant, an equitable lien when a mortgage holder has not perfected its lien. Even if the Court were to grant plaintiff such a lien, debtors-defendants would be able to avoid it pursuant to 11 U.S.C. § 544. Granting plaintiff such a lien would therefore serve no legitimate purpose.
Full Bankruptcy Court Decision:
