Opinion
Bankruptcy No. 91-03677-9P7.
January 10, 1994.
Raymond C. Farfante, Jr., Tampa, FL, for debtor.
R. John Cole, II, Sarasota, FL, for movant.
Stephen Meininger, Tampa, FL, Trustee.
Rodger B. King, for U.S. Trustee.
ORDER ON OBJECTION TO REPORT AND NOTICE OF INTENT TO SELL PROPERTY OF THE ESTATE "AS IS, IN ITS PRESENT CONDITION"
THIS IS a Chapter 7 case and the matter under consideration is an Objection to the Report and Notice of Intent to Sell Property of the Estate, filed by Stephen Meininger (Trustee), the trustee in charge of administration of this case. The Objection was filed by Appliance Refinishing, Inc., Richard Blessinger, and Charles Merkley, unsecured creditors of Beulah Moritz (Debtor). The Objection is based on the contention that the Trustee is attempting to sell property of the estate, a Promissory Note (Note), for an insufficient amount. The Objection is also a request for permission for the above unsecured creditors to offset their claims against the estate in exchange for the Note. The facts as they were established at the duly noticed hearing are as follows:
On March 25, 1991, the Debtor filed her Petition for Relief under Chapter 7 of the Bankruptcy Code. In his pursuit to liquidate the Debtor's nonexempt assets, the Trustee filed a Report and Notice of Intention to Sell on August 25, 1993. The proposed sale involved a Promissory Note dated March 29, 1986 payable to the Debtor by J M Screening, the maker of the note.
In the Notice, the Trustee stated that he had received an offer to purchase the Note from Roger King in the amount of $20,100.00. The Notice also provided that the Trustee would entertain any Objections to the proposed sale or any higher bids within 20 days of the Notice and that bids must be "accompanied by a deposit of 100% of the proposed higher purchase price." The balance remaining on the Note is $85,000.00, and the payments are being timely made.
On September 7, 1993, Appliance Refinishing, Inc., Richard Blessinger, and Charles Merkley, (unsecured group) whose claims together comprise most of the unsecured claims in this Chapter 7 case, filed an Objection to the Notice. In the Objection, the unsecured group contends that the offer proposed by King is in an insufficient amount and seeks permission of the Court to "bid" their respective claims in lieu of paying in cash for the purchase of the Note. Their bid in the amount of $25,000.00 is actually an attempt for the unsecured group to acquire the Note in exchange for partial satisfaction of their claims.
It is clear, that while a secured creditor may setoff its allowed secured claims against the purchase price of a property of the estate to be sold by the Trustee pursuant to § 363(k), there is no comparable provision which would permit unsecured creditors to offset their claims. Based on the foregoing, this Court is satisfied that the Objection is not well taken, and the Objection is overruled.
Accordingly, it is
ORDERED, ADJUDGED AND DECREED that the Objection be, and the same is hereby, overruled, and that any bids or objections must be filed within 10 days of the entry of this Order and must comply with the requirements provided in the Notice.
DONE AND ORDERED.