15 Feb New Massachusetts Bankruptcy Judge Begins Work
The Bankruptcy Law Network welcomes new Massachusetts Bankruptcy Judge Frank J. Bailey. Judge Bailey is a former commercial litigator with the firm of Sherin and Lodgen LLP in Boston and was appointed in October 2008 (link requires PDF Reader) to fill the spot vacated by Judge Somma. Judge Bailey recently began his work and issued his first published opinion in the case of In re Abdulla, 2009 WL 348365 (Bkrtcy.D.Mass. 2009), which he summarized as follows:
Four months into this chapter 11 case, Washington Mutual Bank (“WMB”), which holds a mortgage on the debtors’ two contiguous apartment buildings (“the Property”), seeks relief from the automatic stay to foreclose its mortgage. The debtors, Anwar Abdulla and Seeni Anwar, seek authority to use WMB’s cash collateral, the rents generated by the nine currently-occupied units. Having held an evidentiary hearing on both motions, and for the reasons set forth below, the Court will deny relief from stay, grant authority to use cash collateral for approximately sixty days, and require that a plan be filed within ten days, with its confirmability to be adjudicated within sixty days.
The opinion is an early one in a case which may or may not succeed after the debtors have an opportunity to rent additional apartment units and file a plan. The Court gave the debtors the benefit of the doubt and a chance to reorganize by rejecting Washington Mutual motion to lift the stay. Critically, the Court found that a reorganization was possible despite Washington Mutual’s contention that it controlled an impaired class of claims which would not vote to approve the plan. The Court posited that the debtor might separartely classify Washington Mutual’s unsecured claim to gain plan confirmation.
It will be interesting to watch how Judge Bailey’s opinions develop through the course of 2009 and beyond.
Nicholas Ortiz, Boston Bankruptcy Attorney
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