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McCannon v. Marston

United States Court of Appeals for the Third Circuit
679 F.2d 13 (1982)


In 1973, Miriam McCannon (plaintiff) entered into an agreement to purchase a condominium from The Drake Hotel (The Drake) in Pennsylvania. She made a down payment toward the purchase price and moved into the property, where she continued to reside throughout the relevant proceedings. McCannon did not record the condominium purchase, and settlement of the sale was determined never to have occurred. In 1979, The Drake filed a Chapter 11 bankruptcy petition. In 1981, McCannon filed a complaint, requesting that the automatic stay be lifted and that her purchase agreement with The Drake be specifically performed. Marston, the appointed trustee in the Drake bankruptcy (defendant), objected. The bankruptcy court granted the trustee’s motion for judgment after McCannon’s presentation of her case. The court held that the trustee was entitled to avoid McCannon’s interest in the property under Pennsylvania law and 11 U.S.C. § 544(a)(3) because the latter invested the trustee with the status of a bona fide purchaser of McCannon’s condominium, without regard to knowledge of McCannon’s interest. The district court affirmed. McCannon appealed.

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