In Re Shree Mahalaxmi, Inc., 503 B.R. 794
(Bankr. W.D. Tex. 2014) –
After a mortgage lender learned of a pre-petition default during
a bankruptcy, it filed an amendment to its proof of claim to add
pre-petition default interest. The debtor objected to both the
original claim and to the addition of pre-petition default
interest. The court's decision turned on interpretation of the
loan documents under applicable state law.
The debtor owned a hotel, which was subject to a deed of trust
in favor of the lender. At some point after the loan was made and
prior to bankruptcy, the debtor placed two junior liens on the
hotel in favor of a third party bank.
Originally the lender filed a proof of claim for ~$619,000.
After the special servicer for the loan put the note up for
auction, the auction company notified the lender of the two junior
liens. In response, the lender amended its proof of claim to
include pre-petition default interest on the basis that the junior
liens
