U.S. Bank Nat'l Assoc. v. Lewis & Clark Apartments, et al, No. 12-6023 (8th Cir. 2012)
Annotate this CaseU.S. Bank appealed from an order granting the motion of debtor to value U.S. Bank's allowed secured claim pursuant to section 506(a) of the Bankruptcy Code, and valuing the claim at $3,500,000. The Bankruptcy Appellate Panel held that the order was not final but that U.S. Bank's alternative request to grant leave to appeal it as an interlocutory order should be granted. The Bankruptcy Appellate Panel also concluded that low income tax credits that the owner of the property was eligible to claim, as well as the obligations they imposed, did affect the value of the property and should have been considered as part of the property's value. Accordingly, the court reversed and remanded.
Court Description: Bankruptcy Appellate Panel - valuation under sec.506(a). Order valuing collateral, standing alone, is not a final appealable order but leave to review this interlocutory appeal is granted, as case presents a novel issue whether tax credits and attendant use restrictions attributable to the Bank's collateral can be considered in valuing such collateral. Bankruptcy court erred in failing to attribute value to the low income tax credits that the property owner is eligible to claim, as the value of the tax credits reflects what a willing buyer would pay to purchase the property. On remand the bankruptcy court should afford the opportunity to offer additional valuation evidence. [ October 10, 2012
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