Financial Services Blog

Showing 28 posts in Liens.

What Do You Do With Your Out-of-State Judgment?

            You have successfully obtained a judgment against a party that owes you money.  The problem is, the jurisdiction in which you obtained the judgment is not the jurisdiction in which the debtor/defendant has assets.  Was your judgment obtained in vain? Read More ›

Have You Considered A Non-Wage Garnishment?

You fought hard for your judgment.  Your satisfaction in having won is soon replaced with the knowledge that you still do not have the money that is owed to you.  What are your options? Read More ›

Do Lenders Have A Right To Credit Bid On Their Collateral?

Last month, the U.S. Supreme Court agreed to hear another bankruptcy case and this one could have a profound effect on a lender’s bidding rights when its collateral is up for sale.  RadLAX Gateway Hotel, LLC v. Amalgamated Bank, No. 11-166, cert. granted Dec. 12, 2011.  In the lower courts, the debtor sought approval of a bankruptcy plan which would have sold the lender’s collateral at auction without allowing the bank to credit bid.  The Seventh Circuit Court of Appeals rejected that approach, saying that secured creditors had a right to acquire the property by bidding with their liens. Read More ›

American Law Institute Attempts To Clarify Law Concerning Transfer And Enforcement Of Mortgage Notes

The current “Mortgage Crisis” has prompted many borrowers to challenge the right of a lender or mortgage servicer to bring a foreclosure action, asserting that errors in the process of selling or assigning the note and/or mortgage make it difficult or impossible to enforce those documents.  Those contests have often been couched in terms of lack of standing, inability to prove ownership of mortgage documents or invalid/undocumented assignment of those documents.  Both counsel and courts have sometimes evidenced uncertainty concerning the applicable law and its impact on these issues.  On November 14, 2011, the American Law Institute published a report entitled “Application of the Uniform Commercial Code to Selected Issues Related to Mortgage Notes” which attempts to clarify some of the frequently encountered questions in this area.  It can be found at www.uniformlaws.org/shared/committees_materials/PEBUCC/PEB_Report_111411.pdf. Read More ›

Sixth Circuit Avoids Bank's Lien Interest In Manufactured Home

The case of In re Dickson, 655 F.3d 585 (6th Cir. 2011) centered on the status of the debtor’s manufactured home under Kentucky law.  In Kentucky, a manufactured home is considered personal property.  As such, in order for a lien to be effective, it must be noted on the certificate of title.  A manufactured home may be converted to real property, however, if the owner files an affidavit that states it is permanently affixed to real estate and then surrenders title.  Read More ›

Kentucky Law Regarding Trade Fixtures - More Than Meets The Eye

Lenders and other creditors often require security interests in the property owned by the borrower or debtor.  But how often does the lender examine whether the property is actually a fixture and therefore realty subject to filing as a lien in the real estate records, or a trade fixture, and therefore personal property with the lien recorded as a U.C.C.-1 with the Secretary of State.  If the lender or other creditor actually examined the property, how would it determine whether the property is realty or personal property.  The size and weight of the property or the “annexation” of the equipment to the real estate with bolts or other methods is not dispositive–but rather the intended use of the property, with the primary test whether the property is used in the course of the tenant’s business for the tenant’s benefit.  Thus, a creditor or lender will likely need to know the business use of the property and whether any contract between the tenant and the landlord seeks to identify what would otherwise be deemed personal property as a fixture and therefore realty. Read More ›

Improperly Executed But Properly Recorded Mortgage Isn't A Lien

            The mortgage was not properly executed because the borrower / mortgagor’s signature was not notarized as required by Ohio Revised Code Section 5301.01.  The mortgage was appropriately recorded despite the deficiency.  With record notice of the current mortgage (and possibly actual notice too), a second lender advanced money to the same borrower and recorded a properly executed mortgage.  The latter mortgage was recorded about two years after the first, improperly executed, mortgage was recorded.  Read More ›

Sixth Circuit Bankruptcy Appellate Panel Directs Lower Court To Determine Secured Party As Of The Date Of Debtor's Bankruptcy Petition When Notes Were Endorsed After Petition Filed

In a recent appeal to the Sixth Circuit Bankruptcy Appellate Panel, In re Collins, 2011 WL 4445451 (6th Cir. BAP Aug. 12, 2011), the trustee sought a declaratory judgment to determine the validity, extent, and priority of liens on the debtor’s real property held by four defendants.  The trustee appealed the district court’s dismissal of his complaint as to purported holders of the debtor’s first and second mortgages on the debtor’s property. Read More ›

Seventh Circuit Rejects Bankruptcy Confirmation Plan That Eliminates Credit Bidding

The U.S. Court of Appeals for the Seventh Circuit recently affirmed a bankruptcy court’s decision refusing to confirm debtors’ reorganization plan that included auction procedures that forbade secured creditors from “credit bidding” for the assets. In re River Road Hotel Partners, LLC, No. 10-3597, 2011 WL 2547615 (7th Cir. June 28, 2011). In that case, the debtors (owners of various hotel properties) proposed a plan of reorganization that included auctioning certain properties encumbered by security interests. The lenders holding security interests in the properties to be auctioned objected to the plan of reorganization because the proposed plan did not allow them to credit bid, that is, to offset the price offered in the auction against the amount the debtor owes the creditor. Read More ›

Sixth Circuit Upholds Validity Of Notarized Signature by Wife With POA 1

In Drown v. National City Bank (In re Ingersoll), the debtor’s husband executed a general power of attorney in favor of his wife, the debtor.  That same day, the debtor executed a mortgage on real property owned jointly with the right of survivorship.  The debtor-wife signed the mortgage on behalf of her husband by stating that she was signing as power of attorney.  The notary certificate on the mortgage stated that both husband and debtor personally appeared before the notary and signed the mortgage when, in fact, only the debtor appeared and physically signed for herself and, by virtue of a valid power of attorney, her husband.  The notary certificate makes no reference to the wife’s power of attorney status.  The husband passed away thereafter, and the debtor-widow filed a voluntary petition for chapter 7 relief some two and a half years later.  The bankruptcy trustee sought to avoid the debtor’s mortgage by arguing that the certificate of acknowledgement was invalid because it stated that the debtor and her husband personally appeared and signed the mortgage when, in fact, only the debtor appeared and signed the mortgage for herself and, by virtue of a valid power of attorney, for her husband.  The bankruptcy trustee sought to avoid the mortgage, pursuant to 11 U.S.C. § 544(a)(3), which provides that a trustee has the same rights that a bona fide purchaser for value would enjoy under state law --- seeking to avoid the mortgage, which mortgage was being held by the bank. Read More ›

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Attorney Spotlight

Christopher C. Tieke is an associate in Frost Brown Todd's Louisville office, focusing his practice on business litigation. He graduated from the University of Cincinnati College of Law, with magna cum laude honors; served as an Associate Member of the University of Cincinnati Law Review; and participated in the Entrepreneurship and Community Development Clinic.

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