In re Free Lance-Star Publishing Co.
United States Bankruptcy Court for the Eastern District of Virginia
512 B.R. 798 (2014)
- Written by Eric Miller, JD
Facts
The Free Lance-Star Publishing Company and associated landowner William Douglas Properties, LLC (the debtors) (defendant) obtained a loan from Branch Banking & Trust (BB&T). The loan was secured by real and personal property, but the collateral did not include three parcels of real estate known as the tower assets. A severe recession marked the beginning of the debtors’ financial decline. The BB&T loan was acquired by DSP Acquisition, LLC (DSP) (plaintiff). DSP pressured the debtors to file for bankruptcy and expressed an intention to acquire their assets. The bankruptcy filing—under Chapter 11 of the United States Bankruptcy Code—eventually occurred. Realizing that it lacked a secured interest in the tower assets, DSP recorded two financing statements without telling the debtors. At a later hearing, DSP sought new liens on the tower assets from the bankruptcy court but continued to omit mention of the financing statements. The debtors sought court approval of bidding procedures to auction their assets, including the tower assets. DSP filed a complaint, seeking a declaration that it had valid liens on substantially all the debtors’ assets, including the tower assets. Both sides moved for summary judgment.
Rule of Law
Issue
Holding and Reasoning (Huennekens, J.)
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