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Bank Leumi Trust Co. of New York v. Diamond Sales Co. of Miami (In re Diamond Sales Co. of Miami)
Citations: 32 B.R. 21; 1983 Bankr. LEXIS 5802Docket: Bankruptcy No. 82-01052-BKC-SMW; Adv. No. 83-0280-BKC-SMW-A
Court: United States Bankruptcy Court, S.D. Florida.; July 14, 1983; Us Bankruptcy; United States Bankruptcy Court
Findings of Fact and Conclusions of Law were issued by Bankruptcy Judge Sidney M. Weaver regarding an Adversary Complaint related to the automatic stay and the determination of liens. Diamond Sales Company Of Miami, Inc. ("the Debtor") had filed for Chapter 11 protection on June 4, 1982, which was converted to Chapter 7 on January 21, 1983, following the appointment of a Trustee. The Bank Of Miami, Inc. was dismissed as a Defendant after assigning its interest to the United States, which holds a secured lien on the Debtor's assets, including equipment and inventory, perfected as a first lien through recording with the Florida Secretary of State. The United States is owed $44,878.01 in principal, interest, costs, and attorney’s fees.
Lilli Of Miami, Inc. ("Lilli") held a security interest in certain consigned inventory but has no claim to remaining inventory, as all consigned items had been paid for, returned, or used by the Debtor prior to June 4, 1982, rendering Lilli an unsecured creditor. Constellation Of Florida, Inc. similarly claimed a security interest but failed to file the required Financing Statement, also classifying it as an unsecured creditor.
Bank Leumi Trust Company Of New York ("Leumi") has a second lien as a secured creditor, with a security interest in all accounts and goods, and is owed $188,000.00 in principal, interest, costs, and attorney’s fees. The court denied a motion from Leumi and the Trustee for the United States to marshal assets, as Lilli Swaebe was not liable to the Bank Of Miami, Inc., negating the necessity for marshalling.
The court found that the assets in question are not essential for the Debtor’s reorganization, and the United States and Leumi are not adequately protected. Consequently, the automatic stay is modified to allow both the United States and Leumi to foreclose on their security interests. A Final Judgment reflecting these findings is to be entered pursuant to Bankruptcy Rule 921(a).
Lilli of Miami, Inc. and Constellation of Florida, Inc. hold unsecured claims against the estate of Diamond Sales Company of Miami, Inc. The United States has a secured lien on the company's assets, including equipment and inventory, amounting to $44,878.01, along with accrued interest, costs, and attorney's fees, which takes precedence over any claims from the Defendants. Bank Leumi Trust Company of New York has a secured lien on Diamond Sales Company's current and future assets totaling $188,000.00, with interest, costs, and attorney's fees, ranking below the U.S. lien but above other Defendants' claims. The automatic stay is modified to allow Bank Leumi and the U.S. to enforce their security interests legally. The Court maintains jurisdiction to award costs and attorney’s fees upon appropriate request.