Magazine article The RMA Journal

What a Difference 10 Minutes Make!

Magazine article The RMA Journal

What a Difference 10 Minutes Make!

Article excerpt

Tales of WHOA!

In Merrill Lynch Credit Corp. v. James King, et al., 255 B.R. 388 (D.V.I. 2000) the mortgagees rights in a mortgage foreclosure proceeding were determined by what happened between 10:00 and 10:10 a.m. Atlantic Standard Time on December 1, 1998. The mortgagee's foreclosure sale was held to be unaffected by a bankruptcy filing but the mortgagee did not receive the proceeds of the foreclosure sale.

James and Omah King owned real estate in the U.S. Virgin Islands subject to a first mortgage in favor of Merrill and a junior mortgage in favor of Atlantic Steel Corporation. Because of a default, Merrill filed a mortgage foreclosure action. Atlantic became a party to the foreclosure because the Kings weren't paying the junior mortgage debt. The Kings resolved their differences with Merrill, and Merrill dismissed its complaint. But Atlantic continued on.

On April 9, 1997, the Virgin Islands federal court entered a default order against the Kings in favor of Atlantic. The United States Marshal conducted a foreclosure sale of the property on December 1, 1998, which began between 10:00 and 10:02 a.m. Atlantic Standard Time (AST) and ended by 10:10 a.m. AST. There was one successful bidder.

On that same day (December 1, 1998), at 9:10 a.m. Eastern Standard Time (EST), which was equivalent to 10:10 a.m. AST, the Kings filed a petition for relief under the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Virginia. …

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