December 2013 News

On December 3rd, 2013, Judge William L. Stocks, United States Bankruptcy Judge for the Middle District of North Carolina entered an Order finding in favor of Partner Darren McDonough and associate Justin Kay of Ivey, McClellan, Gatton & Talcott, LLP, and the Debtor’s claim against a bank. The Chapter 11 Debtor, an individual who owned over 50 rental properties, had a loan with American National Bank & Trust Company in the original amount of $305,000. The loan was secured by three rental houses and several vacant lots. By the time the Debtor filed for relief under Chapter 11 Bankruptcy, the Debtor contended that the properties were worth more than the amount owed to American National. Pursuant to the Plan of Reorganization, American National foreclosed on the properties and submitted a bid of $205,200 for the property, and then asserted that the individual owed another $104,917.83. The firm asserted that the individual owed nothing to American National, as N.C.Gen.Stat. Sec. 45-21.36 entitles the individual to offset the debt the amount that the bank “should” have bid at foreclosure. The Bankruptcy Court ultimately agreed with the firm’s argument, and found that if American National bid at foreclosure the appraised amount, the individual would owe nothing, and as a result the individual shouldn’t pay anything to the bank. Congratulations to Partner Darren McDonough and associate Justin Kay for their win!