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to determine whether the waiver of the automatic stay was enforceable.4 While the court found all four factors to weigh in favor of enforcement, it put the most weight in the fourth factor -- plan feasibility. After an extensive valuation of the debtor's real estate, which the debtor proposed to sell condo-by-condo to fund its plan, the court concluded that the plan was speculative, at best, and all together infeasible. Because the Desai factors all weighed in favor of enforcement, then, the court granted the bank's motion for relief from stay and allowed the foreclosure to go forward in state court.
* In re Monitor Single Lift I, Ltd., 381 B.R. 455 (Bankr. S.D.N.Y. Feb. 2008) (Glenn, J.)
Automatic stay from debtors' voluntary chapter 11 filings halted service of the earlierfiled Cayman Island proceedings. This was a decision on a motion for dismissal or abstention of the debtors' voluntary chapter 11 cases. While it did not dispose of any automatic stay issues, it is pertinent here in that the court recognized that certain creditors had beaten the debtors to the punch by a few hours. Those creditors filed applications for the appointment of provisional liquidators in the Cayman Islands a few hours before the debtors filed their chapter 11 petitions in New York. However, the automatic stay prevented service of the Cayman Island proceedings on the debtors, and, for that reason, the court recognized that the creditors correctly took no further actions in the Cayman Island proceedings.
* Calyon New York Branch v. Am. Home Mortg. Corp. (In re Am. Home Mortg. Corp.), 379 B.R. 503 (Bankr. D. Del. Jan. 2008) (Sontchi, J.)
A contract for the sale and repurchase of mortgage loans fell within the new definition of a "repurchase agreement" and so was protected by the safe harbor provisions of sections 555 and 559. Said the court, the new BAPCPA definition of "repurchase agreement"5 now includes contracts for the sale and repurchase of mortgage loans. Because of this broader definition, purchasers under those contracts are protected by the safe harbor provisions of sections 555 and 559 to exercise their contractual rights triggered by ipso facto clauses that would otherwise be halted by the automatic stay. 6 In this case, under the agreement between the debtor and Calyon, Calyon would provide the debtor with the liquidity to originate mortgage loans. The debtors then would sell those mortgage loans, and the purchasers would hold the loans and re-sell them to the debtors within one year (affording the debtors time to securitize the loans and sell them off as a bundle). Judge Sontchi concluded that this arrangement was a "repurchase agreement," and that the safe harbor provisions allowed Calyon to exercise its rights under the agreement that otherwise would violate the automatic stay or would be an unenforceable ipso facto provision, per section 365(e)(1).
4 Those factors are: (1) the sophistication of the parties making the waiver; (2) the consideration for the waiver; (3) the effect of the waiver on other parties; and (4) the feasibility of the debtor's plan. In re Desai, 282
B.R. 527 (Bankr. S.D. Ga. 2002).
5
See 11 U.S.C. S 101(47) (2007).
6
But see id S 362(b)(7) (exempting from the automatic stay those rights protected by section 559 and triggered by ipso facto clauses that would otherwise be unenforceable under section 365(e)(1)).
