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GENERAL33643
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Last modified
8/24/2016 7:55:30 PM
Creation date
11/23/2007 7:41:57 AM
Metadata
Fields
Template:
DRMS Permit Index
Permit No
M1977376
IBM Index Class Name
General Documents
Doc Date
5/18/1993
Doc Name
MEMO DECISION & ORDER RELATED TO DESTORS OBJECTION DATED 10/02/92 TO CLAIM OF MLB DEBOTS MOTION DATE
Media Type
D
Archive
No
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<br />economic conditions in the region as set forth in the appraisal, and persisting concerns about <br />geological stability at the site, it would be a practical impossbility to find a buyer for the <br />Quarry. In fact, attempts by CF&I to interest a buyer have been futile. Regardless of the <br />appraised value of the property, there is no realizable equity in the property available to <br />CF&I prior to abandonment or to Colorado after abandonment. <br />At least one court has recognized that where reorganization is contemplated, <br />the estate might ultimately realize some benefit from the use of fully encumbered property. <br />!n re Beker Indus. Corp., 64 B.R. 900 (Bankr. S.D.N.Y. 1986), order rev'd by, 89 B.R. 343 <br />(S.D.N.Y. 1988).' In Beker Industries, a chapter 1 ] debtor-in-possession sought to sel] an <br />important, but arguably unprofitable, asset out of the ordinary course of business prior to <br />plan formulation and acceptance of a plan or in the aitetnanve, to abandon the property <br />under § 554. The court held that the debtor was not entitled to abandon a fertilizer <br />manufacturing plant or the debtor's interest in a partnership owning and operating a <br />phosphate mine supplying raw material for use at the plant, where there was evidence of <br />possible return to profitability and recovery of maintenance costs. Id at 910-12. The court <br />concluded that the test announced in Comminee of Egttiry Security Holders v. Lionel Corp. <br />In BekQ, the banrruptry court concluded that there was no good business reason for <br />abandonment o[ estate assets in light of the overall posture o[ the case. The court charged the maintenance <br />cost to the secured creditors pursuant to § 506(c) and disposed of the debtor's argument that denial of their <br />motion would inappropriately saddle them with maintenance charges on a property in which they had no <br />equity. The district mun reversed the banJwptry court order assessing the costs o[ maintaining estate assets <br />because maintenance would not con[er a dvect benefit on the secured creditors. The district coon did not <br />overrule the Tower coon's appliption of the Lrvnef test to a motion to abandon property by a chapter I1 <br />debtor-in-possession. The court disapproved of the logic employed by the lower court to reach the conclusion <br />to pay maintenance costs from the proceeds of the sale of the assets after the motion to sale or abandon 4ad <br />been denied. <br /> <br />
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