In Re Anchorage Boat Sales, Inc.
United States Bankruptcy Court for the Eastern District of New York
4 B.R. 635 (1980)
- Written by Philip Glass, JD
Facts
In February 1980, Anchorage Boat Sales (Anchorage) (debtor) filed for Chapter 11 bankruptcy. At that time, Midlantic Bank (Midlantic) (creditor) held a security interest on Anchorage’s property, including inventory and accounts receivable. As no equity existed in Anchorage’s property due to Midlantic’s claim amount exceeding the property’s value by $121,575.72, Anchorage was not likely to be commercially viable in the future. In fact, Midlantic demonstrated that Anchorage’s business would suffer a considerable net loss over the next year. Anchorage had no external revenue sources to provide support for reorganization. Only two lenders had continued lending money to Anchorage, and only a few boat manufacturers had continued to supply inventory. Thus, the court ruled that the likelihood of a successful reorganization was small. Thereafter, Midlantic sought relief from the automatic stay with respect to its security interest on Anchorage’s property.
Rule of Law
Issue
Holding and Reasoning (Radoyevich, J.)
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