In re Coronet Capital Co.
United States Bankruptcy Court for the Southern District of New York
142 B.R. 78 (1992)
- Written by Rich Walter, JD
Facts
SSD Properties Corporation (SSD) mortgaged real property to secure a loan from Coronet Capital Company (Coronet). In return for $500,000, Coronet purportedly assigned most of its interest in the mortgage to a firm called JIB (plaintiff). The assignment agreement (1) guaranteed payments to JIB at a minimum annual interest-return rate of 15 percent, whether or not SSD remained current on its mortgage payments, and (2) obligated Coronet to repay the balance of JIB’s senior interest, at the return rate, before retaining any sums received at the maturity of SSD’s loan. Although SSD later defaulted on its loan obligation, Coronet continued to pay JIB in accordance with the assignment agreement. Coronet’s creditors subsequently placed Coronet in involuntary bankruptcy, which automatically stayed actions by the creditors against Coronet’s bankruptcy estate. JIB moved for relief from the automatic stay insofar as it barred JIB from asserting the share JIB claimed to own in SSD’s mortgage. The bankruptcy trustee (defendant) opposed JIB’s motion, arguing that the assignment agreement actually documented a disguised loan rather than a true sale.
Rule of Law
Issue
Holding and Reasoning (Conrad, J.)
What to do next…
Here's why 788,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 46,200 briefs, keyed to 988 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.
