Lane v. The Bank of New York Mellon, No. 18-60059 (9th Cir. 2020)
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A bankruptcy court may not void a lien under 11 U.S.C. 506(d) when a claim relating to the lien is disallowed because the creditor who filed the proof of claim did not prove that it was the person entitled to enforce the debt the lien secures.
The Ninth Circuit affirmed the bankruptcy appellate panel's opinion reversing the bankruptcy court's summary judgment for the Chapter 13 debtor in the debtor's adversary proceeding seeking a declaration that a lien securing a disallowed claim was void. Because debtor conceded that if the panel affirmed the BAP on this issue, then the order reversing the fee award should also be affirmed. Therefore, the panel affirmed the BAP's decision to reverse the fee award.
Court Description: Bankruptcy The panel affirmed the Bankruptcy Appellate Panel’s opinion reversing the bankruptcy court’s summary judgment in favor of a Chapter 13 debtor in the debtor’s adversary proceeding seeking a declaration that a lien securing a disallowed claim was void. The panel held that a bankruptcy court may not void a lien under 11 U.S.C. § 506(d) when a claim relating to the lien is disallowed because the creditor who filed the proof of claim did not prove that it was the person entitled to enforce the debt the lien secures. Accordingly, the panel affirmed the BAP’s decision to reverse the bankruptcy court’s summary judgment and award of attorney’s fees in favor of the debtor.
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