Summary
denying trustee's motion to sell certain property because the sale would net nothing for unsecured creditors
Summary of this case from In re ChristensenOpinion
Bankruptcy No. 485-01595-LO-7.
January 16, 1987.
Jake Fontenot, Mamou, La., for debtors.
W. Simmons Sandoz, Opelousas, La., Trustee.
OPINION AND ORDER
This matter comes before the Court on the trustee's application to sell certain movables by "offset bid". Such a sale means that a secured creditor bids the amount of the debt owed to him, plus "administrative costs". The sale nets nothing for the unsecured creditors, but may save the secured creditor some costs and time delays of foreclosure in state court. In this case, the first mortgagee bid in the amount of the debt. The second mortgagee increased that bid by one dollar.
It appears that such sales are limited to the Western and Middle Districts of Louisiana and do not exist elsewhere to any significant degree. This practice in the Western District has been limited by the General Order entered on September 8, 1986, and is currently under review. It does increase burdens placed upon the Court and the Clerk's office. The view has been taken that the Bankruptcy Court should not serve as an alternative foreclosure forum. See In re Crisp, 26 B.R. 274 (Bankr.W.D.Ky. 1982). The Bankruptcy Code provides for the abandonment of those assets in which there is no significant equity for the estate. The trustee need not administer such assets, and if he does so, should be compensated only to the extent his actions actually benefitted the secured creditor. 11 U.S.C. § 506(c); In re Robertson, 14 B.R. 706 (Bankr.N.D.Ga. 1981); In re Lambert Implement Co., Inc., 44 B.R. 860 (Bankr.W.D.Ky. 1984). In this case, there is admittedly no equity, and the record is unclear as to whether all parties with an interest in the security have consented to sale. By reason of the foregoing, permission to sell by offset bid in this case is hereby DENIED.