25bk10375
Upon the motion of mortgage creditor/foreclosure sale purchaser for relief from the automatic stay, asserting both that a debtor’s investment real estate was no longer part of the estate following a prepetition foreclosure sale and, alternatively, that cause existed under 11 U.S.C. § 362(d)(1) or (d)(2), held: The property remains property of the estate as, under Illinois law, a foreclosure sale is not final until judicially confirmed and no confirmation had occurred as of the petition date. A debtor retains legal and equitable interests until a court confirms the foreclosure sale, and those interests are sufficient to invoke the automatic stay.  Whether and how such property may be treated under a chapter 13 plan is subject to conflicting Seventh Circuit precedent, and final determination of that issue in a summary proceeding is inappropriate. 

As to relief from stay, the movant established cause under 11 U.S.C. § 362(d)(1) for lack of adequate protection. While the movant failed to complete the statement required under the Local Rules for such motions, the facts of the case (inadequate treatment of the movant’s claim under the chapter 13 plan) demonstrate a lack of adequate protection. As to 11 U.S.C. § 362(d)(2), the movant established that the debtor lacks equity in the property, its only burden under 11 U.S.C. § 362(g).  As to the remainder, the debtor offered only speculative assertions regarding the feasibility of any reorganization and the chapter 13 plan was not feasible on its face. As the debtor has not shown a reasonable possibility of a successful reorganization within a reasonable time, the property is not necessary for an effective reorganization under 11 U.S.C. § 362(d)(2).  Finally, as to the movant’s contention that the debtor must show cause of the fourteen-day stay under Bankruptcy Rule 4001(a)(4), the court rejects that argument as contrary to the Rule itself.  The motion for relief from stay is, therefore, GRANTED, subject to the fourteen-day stay imposed by Rule 4001(a)(4).