Grundy Nat. Bank v. Tandem Min. Corp., No. 84-1264

CourtUnited States Courts of Appeals. United States Court of Appeals (4th Circuit)
Writing for the CourtBefore WINTER, Chief Judge, and RUSSELL and CHAPMAN; HARRISON L. WINTER
Citation12 C.B.C.2d 264,754 F.2d 1436
Docket NumberNo. 84-1264
Decision Date15 February 1985
Parties12 Collier Bankr.Cas.2d 264, Bankr. L. Rep. P 70,258 GRUNDY NATIONAL BANK, Appellant, v. TANDEM MINING CORPORATION; Jerry Marshall Lester; Benny Joe Burks; Appellees.

Page 1436

754 F.2d 1436
12 Collier Bankr.Cas.2d 264, Bankr. L. Rep. P 70,258
GRUNDY NATIONAL BANK, Appellant,
v.
TANDEM MINING CORPORATION; Jerry Marshall Lester; Benny
Joe Burks; Appellees.
No. 84-1264.
United States Court of Appeals,
Fourth Circuit.
Argued Oct. 30, 1984.
Decided Feb. 15, 1985.

Page 1437

John E. Kieffer, Bristol, Va. (Woodward, Miles & Flannagan, P.C., Bristol, Va., on brief), for appellant.

Robert T. Copeland, Abingdon, Va. (Copeland & Molinary, P.C., Abingdon, Va., on brief), for appellees.

Before WINTER, Chief Judge, and RUSSELL and CHAPMAN, Circuit Judges.

HARRISON L. WINTER, Chief Judge:

Page 1438

In a Chapter 11 proceeding, the district court reviewed an order of the bankruptcy court entered upon the application of Grundy National Bank (Grundy), a secured creditor, for relief from the automatic stay provided in 11 U.S.C. Sec. 362 to enable it to repossess and liquidate certain collateral on which it had valid liens. The district court affirmed the bankruptcy court's refusal to vacate the stay and its order to require Tandem Mining Corporation (Tandem) to make periodic payments for Grundy's protection, 1 but the district court reversed the bankruptcy court's ruling that Tandem pay interest on its unpaid obligations to Grundy during the pendency of the Chapter 11 proceedings.

Grundy appeals, and we affirm in part and reverse in part. We further order that the collateral be released unless Tandem produces an approved plan of reorganization within sixty days from the issuance of our mandate.

I.

Tandem, a deep coal mine contractor, obtained two two-year secured loans from Grundy in 1982 with interest at 20.21% and gave Grundy an uncontested security interest in, inter alia, a wheel loader and a battery charger. The parties do not dispute that the fair market value of the loader is $26,000 and that of the battery charger is $1,200. At the time of the hearing in the bankruptcy court, the unpaid principal balance on the loader was $25,968.51 (excluding interest of $3,781.43). The battery charger was only partial security for an even larger debt.

On November 4, 1982, Tandem filed a Chapter 11 petition and thereafter was adjudicated a debtor-in-possession. At the time of the proceedings in the bankruptcy court and the district court which give rise to this appeal--and, indeed, to the time of argument of this appeal--neither Tandem nor any creditor had proposed a plan of reorganization.

Since both loans were in default, Grundy, on February 28, 1983, petitioned the bankruptcy court to lift the automatic stay so that it could foreclose on its collateral. The bankruptcy court denied this relief with respect to the loader and the battery charger. It found that the appraised value of the loader and the charger were equal to the unpaid balance of the loans with respect to each, that each had a remaining useful life of five years and that each was necessary for the reorganization of Tandem. Recognizing that a secured creditor is entitled to relief from the automatic stay if adequate protection of his property interests is not arranged, 11 U.S.C. Sec. 362(d), the bankruptcy court concluded that adequate protection could be provided by requiring Tandem to make periodic payments to Grundy in the amount computed by dividing the current unpaid balances on the two items by their remaining useful life of sixty months with interest from the date of hearing at the rate of 9.5%.

Grundy then appealed to the district court. It contended that it was entitled to relief from the automatic stay, that the bankruptcy court erred in extending the payment schedule for the loader and the charger for sixty months, and that the bankruptcy court should have allowed interest at the then-current market rate (16%) rather than the prime rate (9.5%). The district court modified the bankruptcy court's order to provide that the periodic payments would continue only until a plan of reorganization is confirmed and that interest would not be allowed in the periodic payments. In all other respects, it affirmed the bankruptcy court's findings of fact and conclusions of law.

Grundy then appealed to us, persisting in its contention that it is entitled to relief

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from the automatic stay, and, if not, that it is entitled to interest on the periodic payments at the current market rate. Although it took no cross-appeal, Tandem contends that the bankruptcy court entered no final order and hence there was no jurisdiction for an appeal to the district court or to us. We consider these issues in inverse order.

II.

We see no merit in Tandem's argument that both the district court and this court lack jurisdiction to entertain this appeal. Although entitled "Memorandum Opinion and Order" and signed by the bankruptcy judge, it is true that the concluding language of the document ordered counsel "to compute [the periodic] payments and tender forthwith an Order incorporating the provisions set out in this Memorandum Opinion" and that no formal order was ever presented or entered. But the memorandum opinion was precise in its terms and was self-executing, and we were told in oral...

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76 practice notes
  • Ahlers, In re, Nos. 85-5396
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • September 24, 1986
    ...(quoting In re Alyucan Interstate Corp., 12 B.R. 803, 806-09 (Bankr.D.Utah 1981). 6 See Grundy National Bank v. Tandem Mining Corp., 754 F.2d 1436, 1441 (4th Cir.1985). If the secured creditor has not initiated any action to gain possession and liquidate the collateral prior to the filing o......
  • Matter of Holly's, Inc., Bankruptcy No. GG91-84931
    • United States
    • United States Bankruptcy Courts. Sixth Circuit. U.S. Bankruptcy Court — Western District of Michigan
    • April 28, 1992
    ...78 B.R. 852, 865 (Bankr.S.D.Ohio 1987). Other decisions adopting the feasibility test include Grundy Nat'l Bank v. Tandem Mining Corp., 754 F.2d 1436 (4th Cir.1985); Albany Partners, Ltd. v. Westbrook (In re Albany Partners, Ltd.), 749 F.2d 670 (11th Cir.1984); In re Cablehouse, Ltd., 68 B.......
  • Eddleman v. U.S. Dept. of Labor, No. 88-2793
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • January 15, 1991
    ...776 F.2d 802, 805 (9th Cir.1985); In re Boomgarden, 780 F.2d 657, 659-60 (7th Cir.1985); Grundy Nat'l Bank v. Tandem Mining Corp., 754 F.2d 1436, 1439 (4th Cir.1985); In re Leimer, 724 F.2d 744, 745 (8th Cir.1984); In re Taddeo, 685 F.2d 24, 26 n. 4 (2d Cir.1982). While this court has not h......
  • In re Greives, Bankruptcy No. 86-40436
    • United States
    • United States Bankruptcy Courts. Seventh Circuit. U.S. Bankruptcy Court — Northern District of Indiana
    • March 17, 1987
    ...default. The suspension of the creditor's remedies must be adequately protected. See, Grundy National Bank v. Tandem Mining Corporation, 754 F.2d 1436 (4th Cir.1985); In re American Mariner Industries, Inc., 734 F.2d 426 (9th Cir. 1984); In re Deeter, 53 B.R. 623 (Bankr.N. D.Ind.1985); In r......
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76 cases
  • Ahlers, In re, Nos. 85-5396
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • September 24, 1986
    ...(quoting In re Alyucan Interstate Corp., 12 B.R. 803, 806-09 (Bankr.D.Utah 1981). 6 See Grundy National Bank v. Tandem Mining Corp., 754 F.2d 1436, 1441 (4th Cir.1985). If the secured creditor has not initiated any action to gain possession and liquidate the collateral prior to the filing o......
  • Matter of Holly's, Inc., Bankruptcy No. GG91-84931
    • United States
    • United States Bankruptcy Courts. Sixth Circuit. U.S. Bankruptcy Court — Western District of Michigan
    • April 28, 1992
    ...78 B.R. 852, 865 (Bankr.S.D.Ohio 1987). Other decisions adopting the feasibility test include Grundy Nat'l Bank v. Tandem Mining Corp., 754 F.2d 1436 (4th Cir.1985); Albany Partners, Ltd. v. Westbrook (In re Albany Partners, Ltd.), 749 F.2d 670 (11th Cir.1984); In re Cablehouse, Ltd., 68 B.......
  • Eddleman v. U.S. Dept. of Labor, No. 88-2793
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • January 15, 1991
    ...776 F.2d 802, 805 (9th Cir.1985); In re Boomgarden, 780 F.2d 657, 659-60 (7th Cir.1985); Grundy Nat'l Bank v. Tandem Mining Corp., 754 F.2d 1436, 1439 (4th Cir.1985); In re Leimer, 724 F.2d 744, 745 (8th Cir.1984); In re Taddeo, 685 F.2d 24, 26 n. 4 (2d Cir.1982). While this court has not h......
  • In re Greives, Bankruptcy No. 86-40436
    • United States
    • United States Bankruptcy Courts. Seventh Circuit. U.S. Bankruptcy Court — Northern District of Indiana
    • March 17, 1987
    ...default. The suspension of the creditor's remedies must be adequately protected. See, Grundy National Bank v. Tandem Mining Corporation, 754 F.2d 1436 (4th Cir.1985); In re American Mariner Industries, Inc., 734 F.2d 426 (9th Cir. 1984); In re Deeter, 53 B.R. 623 (Bankr.N. D.Ind.1985); In r......
  • Request a trial to view additional results

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