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Although the arrangement of the transfer and repurchase of the loans were considered a "repurchase agreement," the parties disputed who held the rights under the contract to service the loans. Because the contract transferred the mortgage loans to the purchasers on a "servicing retained" basis, the servicing rights under the contract were severable, and, said the court, these rights must be analyzed as separate agreements. Finding that the servicing rights themselves were not repurchase agreements or securities contracts, the court held that the debtors still held the rights to designate servicing agents for the loans. Said the court, while the mortgage loan purchasers were protected by sections 555 and 559 (and, therefore, free to exercise their contractual rights triggered by commencement of the debtors' bankruptcy cases), the loan servicing rights were separate and not equally protected by those safe harbor provisions.7 Therefore, the automatic stay and section 365(e)(1) prevented the mortgage loan purchasers from asserting non-bankruptcy contractual rights with respect to the servicing of the loans.
* Gecker v. Gierczyk (In re Glenn), 379 B.R. 760 (Bankr. N.D. Ill. Dec. 2007) (Black, J.) Trustee was not an "individual" with standing to recover damages for stay violations. The
8
bankruptcy court held that the term "individual," as used in section 362(k), connotes a narrowerclass of human claimants. The court found that a representative of the estate was a distinct type of person or entity other than an individual. Said the court, had Congress intended for an estate representative to recover damages under section 362(k), it would have used a broader term, such as "entity" or "person," instead of the narrower term "individual." In dicta, however, the court noted that non-individuals, such as the trustee in this case, could still ask the court to hold the violator in contempt under section 105(a) and recover its actual costs and attorneys' fees under that section.
* In re Student Fin. Corp., 378 B.R. 73 (Bankr. D. Del. Nov. 2007) (Carey, J.) Lessor's actions were void and could not have resulted in the termination of the lease. In this case, several creditors filed an involuntary petition against the debtor, and the debtor eventually consented to an order for relief. 9 At the time of the filing of the involuntary petition, the debtor was current on its lease payments for a telephone system. However, sometime between the filing of the petition and the order for relief, the debtor defaulted on the lease. In response, the lessor accelerated the balance of the lease and drew down on a letter of credit executed by the debtor as security for the lease. The lessor then filed a motion which, inter alia,
7 The court later denied Calyon's motion to alter or amend the judgment to find that the mortgage loans were sold on a "servicing released" basis as opposed to the initial finding to the contrary. In denying the motion, the court concluded that its factual finding of "services retained" was supported by the evidence at trial and that, even assuming arguendo that its finding was wrong, the court's ultimate conclusion would not have unchanged. See 383 B.R. 585 (Bankr. D. Del. Mar. 2008) (Sontchi, J.).
8 This case was decided under pre-BAPCPA section 362(h), but the court made reference to the language of BAPCPA section 362(k) to confirm its holding that "individual" does not include non-human "persons."
9
The initial petition was a chapter 7 petition. When the debtor consented to an order for relief, the debtor converted the case to a chapter 11. The case was eventually re-converted to chapter 7, and a chapter 7 trustee was appointed.
