Re: Invalidating a sale through BK

Posted by WFL on December 05, 2003 at 17:45:06:

In Reply to: Re: Invalidating a sale through BK posted by Jim V on December 03, 2003 at 01:37:35:

Jim,

Section 548 was used in the past to avoid (overturn) mortgage foreclosures after the fact. Then the U.S. Supreme Court held in BFP v. Resolution Trust Corporation Trust Corporation (114 S. Ct. 1757 (1994))that a regularly conducted, noncollusive foreclosure sale could not be avoided under Section 548. See Consumer Bankruptcy Law and Practice, by Henry J. Sommer, published by National Consumer Law Center, Sixth Edition, Section 10.4.2.6.4 (last paragraph of page 195)

:
: Darryl,

: Just an opinion here, since I'm not an attorney, but I'm under the impression that it's highly unlikely any BK court would overturn any kind of sale if the sale was at least 70% of Fair Market Value. From the anecdotal references I've seen, that seems to be a "benchmark" number that I've always thought was somewhat safe. On foreclosure sales, I'd have to look up case law, but I thought courts have decided that whatever price was obtained at a foreclosure sale was, in fact, a valid price, and could not be considered an "under-value" transfer. I believe it has something to do with the fact that a public auction will generate the highest and best possible price for a given property.

: I'll honestly say that I don't want to do an exchange of legal cites and references, because that takes an awful lot of effort, with limited benefits for both of us.

: But, I'd like to expand my knowledge, and maybe learn a thing or two. Do you have some references handy about post-sale invalidation that I could refer to?

: Any thought, comments or references would be greatly appreciated.

: Respectfully,

: Jim V

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: Jim,



: Section 548 was used in the past to avoid (overturn) mortgage foreclosures after the fact. Then the U.S. Supreme Court held in BFP v. Resolution Trust Corporation Trust Corporation (114 S. Ct. 1757 (1994))that a regularly conducted, noncollusive foreclosure sale could not be avoided under Section 548.  See Consumer Bankruptcy Law and Practice, by Henry J. Sommer, published by National Consumer Law Center, Sixth Edition, Section 10.4.2.6.4 (last paragraph of page 195)



: : 

: : Darryl,



: : Just an opinion here, since I'm not an attorney, but I'm under the impression that it's highly unlikely any BK court would overturn any kind of sale if the sale was at least 70% of Fair Market Value.  From the anecdotal references I've seen, that seems to be a "benchmark" number that I've always thought was somewhat safe.  On foreclosure sales, I'd have to look up case law, but I thought courts have decided that whatever price was obtained at a foreclosure sale was, in fact, a valid price, and could not be considered an "under-value" transfer.  I believe it has something to do with the fact that a public auction will generate the highest and best possible price for a given property.



: : I'll honestly say that I don't want to do an exchange of legal cites and references, because that takes an awful lot of effort, with limited benefits for both of us.



: : But, I'd like to expand my knowledge, and maybe learn a thing or two.  Do you have some references handy about post-sale invalidation that I could refer to?  



: : Any thought, comments or references would be greatly appreciated.



: : Respectfully,



: : Jim V





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