In re Kim, Case No. 07-12972-SSM, January 4th, 2008
Wachovia brought a Motion for Relief from the Automatic Stay to enforce its security interest in the debtors formerly owned property. The property had been sold a few years prior, but the title examiner failed to find and dispose of Wachovia’s lien on the sale of the property. The title agent, RGM, defended this motion requesting more time to investigate whether there was coverage for the Owner in this case.
Judge Mitchell defined the automatic stay, recited that, even though a “creditor may be entitled to relief from the automatic stay does not necessarily require that the stay be terminated, since the statute gives the court broad discretion as to whether relief should take the form of annulment, termination, modification, or conditions protecting the stayed party’s interests.” citing In re Charles H. Jones, No. 98-17991-SSM.
The court pointed out that, “although harm to a third parties from enforcement of a deed of trust is certainly a factor that the court may consider, it should not be allowed to usurp the primary function of the automatic stay, which is to protect the debtor and the bankruptcy estate.”
The court then decided that, because there has been no objection from the Chapter 7 Trustee any concerns respecting the right of innocent third parties were more appropriately directed to the state courts, the motion for relief was granted.
