TRADITIONAL CHAPTER 11 | “CHAPTER 18” STRATEGY
Represented an individual debtor in a sophisticated “Chapter 18” matter — a Chapter 7 discharge followed by a Chapter 11 filing (converted from Chapter 13) — deployed to reimpose the automatic stay and prevent foreclosure of the client’s real property. The firm negotiated an out-of-plan modification of the senior lien to a new 30-year amortization, a creative workaround to the Bankruptcy Code’s anti-cramdown rules that ordinarily bar such restructuring of home loans.
In addition to saving the property through the senior loan modification, the firm lien-stripped a junior lien in the amount of $434,330.48. After the debtor completed plan payments, the firm obtained a judgment declaring the junior lien entirely and permanently void and unenforceable against the property. The Court confirmed Debtor’s plan on Januaryu 9, 2018.
Result: Business property saved; $434,330 junior lien permanently voided
U.S. Bankruptcy Court, Northern District of California — San Jose Division
