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ARTICLE · 19 JULY 2016

Valuing Assets in Chapter 13

Fox Rothschild LLP
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While many people only see the glamorous, large Chapter 11 cases filed in the Delaware Bankruptcy Court, the Court still handles individual bankruptcies – treating them with just as much respect as any other case.

United StatesInsolvency/Bankruptcy/Re-Structuring
L. John Bird
L. John Bird
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While many people only see the glamorous, large Chapter 11 cases filed in the Delaware Bankruptcy Court, the Court still handles individual bankruptcies – treating them with just as much respect as any other case.  On July 8, 2016, the chief bankruptcy judge, Brendan L. Shannon, issued an opinion valuing the mobile home of Ms. Anita Barnard.  A copy of the Opinion is available here.  This was a situation when the valuation methodology was agreed upon – yet there are still some judgment calls.

Case law in this jurisdiction teaches, that the NADA Retail Value Guidebook for Manufactured and Mobile Homes ("NADA") method is the proper resource for mobile home valuations.  Opinion at *1.  The case law then requires that, for cram-down purposes, a formula is applied to determine the appropriate interest rate – Prime plus 1-3 percent.  While lenders will always aim for the top, the borrower will, naturally, aim for the lowest possible rate.  This is exactly what happened

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