In re Page, No. 97-13925-MWV.
Decision Date | 26 June 2000 |
Docket Number | No. 97-13925-MWV. |
Citation | 250 BR 465 |
Parties | In re Michelle D. PAGE, Debtor. |
Court | U.S. Bankruptcy Court — District of New Hampshire |
Geraldine Karonis, Assistant U.S. Trustee, Manchester, NH, for J. Christopher Marshall.
Darlene M. Daniele, Salem, NH, for debtor.
Edmond J. Ford, Ford & Weaver, Noble's Island, Portsmouth, NH, for trustee.
Lawrence P. Sumski, Amherst, NH, trustee.
The Court has before it the trustee's motion to employ a relator in order sell real property of the Debtor, which is her homestead. This case was commenced under Chapter 13 on October 20, 1997 and confirmed on December 18, 1998. On December 20, 1999, it was converted to Chapter 7 after the Debtor was unable to make payments under the plan.
This Court has jurisdiction of the subject matter and the parties pursuant to 28 U.S.C. §§ 1334 and 157(a) and the "Standing Order of Referral of Title 11 Proceedings to the United States Bankruptcy Court for the District of New Hampshire," dated January 18, 1994 (DiClerico, C.J.). This is a core proceeding in accordance with 28 U.S.C. § 157(b).
The Debtor objected to the motion to employ the realtor on the grounds that the trustee is bound by the provisions of 11 U.S.C. § 348(f), and there is no equity in the property for the trustee to sell. Section 348(f) provides:
11 U.S.C. § 348(f). It is the Debtor's position that § 348(f) mandates that the trustee is bound by the value of the real estate as of the date of the original petition, which she claims to be $65,000, and that the trustee cannot benefit from the appreciation of the property, which the trustee now claims to be worth $110,000. The trustee, on the other hand, argues that there was no valuation of the property during the Chapter 13 proceeding and, thus, section 348(f)(1)(B) is not applicable.
The Court agrees with the Debtor and denies the application to employ. Based on the $65,000 valuation, there was no equity in the property for the trustee to sell.
Subsection (f) of section 348 was added to the Bankruptcy Code in October 1994 in an effort to induce individuals to file under Chapter 13. Under this section, absent a showing of bad faith, property of the estate of a converted case consists of the property at the date of the filing, and valuations of property and allowed secured claims are binding in the converted case. In the instant case, there is no allegation of bad faith, and the Court sees no reason to distinguish between property acquired after the original petition date which is clearly not part of the Chapter 7 estate from appreciation of property during a Chapter 13 proceeding.
Section 348(f) does not define what constitutes a valuation. Clearly, there was no specific hearing on valuation of the Debtor's real estate during the ...
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