Opinion
ORDER ON MOTION FOR RELIEF FROM STAY
PETER W. BOWIE, Chief Bankruptcy Judge
T&M Preservation LLC seeks relief from stay to pursue available state law remedies to obtain possession of the Flynn's residence which T&M purchased at a foreclosure sale as a third party bona fide purchaser. In the meantime, debtors filed a motion asking this Court to set aside the foreclosure sale on equitable grounds.
The circumstances of this case are extremely unfortunate, and result from dismissal of debtors' then-pending Chapter 13 case for non-appearance at the 11 U.S.C. § 341 meeting of creditors. It is not disputed that the debtors did not appear, nor that after dismissal the residence was foreclosed upon by the lender, and T&M was the successful bidder, all at a time when no stay was in place.
Subsequently, the debtors moved to vacate the order of dismissal, which was granted. Vacating the order of dismissal did not reinstate the automatic stay status quo ante, as if no dismissal had occurred. Debtors have been unable to provide the Court with authority for the proposition that the Court may vacate a foreclosure sale conducted when no automatic stay was in place to prevent it. Debtors ask this Court to employ its equitable powers to redress a drastic consequence of the case's interim dismissal. However, as the Court noted at the hearing, the Supreme Court has made clear:
The short answer to these arguments is that whatever equitable powers remain in the bankruptcy courts must and can only be exercised within the confines of the Bankruptcy Code.
Norwest Bank Worthington v. Ahlers , 485 U.S. 197, 206 (1988).
For the foregoing reasons, and for those stated on the record during the hearing on debtors' motion to set aside the foreclosure sale, relief from stay to allow T&M to proceed to obtain possession of the property must be granted.
IT IS SO ORDERED.