In re Quality Electronics Centers, Inc.

14 Citing cases

  1. Grella v. Salem Five Cent Sav. Bank

    42 F.3d 26 (1st Cir. 1994)   Cited 467 times
    Holding that "a hearing on a motion for relief from stay is merely a summary proceeding of limited effect," requiring the bankruptcy court to decide only "whether the party seeking relief has a colorable claim to property"

    determination as to whether a creditor has a colorable claim to property of the estate. See, e.g., Estate Construction Co. v. Miller Smith Holding Co., Inc., 14 F.3d 213, 219 (4th Cir. 1994) (hearings to lift the stay are summary in character, and counterclaims are not precluded later if not raised at this stage); Vitreous Steel, 911 F.2d at 1232 (questions of the validity of liens are not at issue in a § 362 hearing, but only whether there is a colorable claim on property); In re Johnson, 756 F.2d 738, 740 (9th Cir.), cert. denied, 474 U.S. 828, 106 S.Ct. 88, 88 L.Ed.2d 72 (1985) (relief from stay hearings are limited in scope to adequacy of protection, equity, and necessity to an effective reorganization, and validity of underlying claims is not litigated); Nat'l Westminster Bank, U.S.A. v. Ross, 130 B.R. 656, 658 (Bankr.S.D.N.Y.), aff'd, 962 F.2d 1 (2d Cir. 1991) (decision to lift stay does not involve determination of counterclaims, and thus those claims are not precluded later); In re Quality Elect. Ctrs., Inc., 57 B.R. 288, 290 (Bankr.D.N.M. 1986) (relief from stay proceedings limited to whether the moving creditor has a colorable claim to a perfected security interest); In re Pappas, 55 B.R. 658, 660-61 (Bankr.D.Mass. 1985) (trustee's counterclaims may be considered, though not adjudicated, at relief from stay proceedings);In re Gellert, 55 B.R. 970, 974-75 (Bankr.D.N.H. 1985) (although a bankruptcy court may consider counterclaims during a relief from stay hearing, it is not authorized to a res judicata determination of such claims on their merits); In re Tally Well Serv., Inc., 45 B.R. 149, 151-52 (Bankr.E.D.Mich. 1984) (a court may merely consider counterclaims and defenses at a relief from stay hearing, but such hearing is not the proper proceeding for those claims' adjudication); cf.

  2. Matter of Vitreous Steel Products Co.

    911 F.2d 1223 (7th Cir. 1990)   Cited 280 times
    Holding that issue preclusion did not bar later questions of preferential transfers under § 547 because the issues necessarily decided at the § 362 hearing were limited to “whether the Bank had a colorable claim of the lien and whether the amount of that lien exceeded the value of the property” and it was not necessary to reach questions of preferential transfers under § 547

    Many cases hold that the issues considered at a § 362 hearing are limited strictly to adequacy of protection, equity, and necessity to an effective reorganization. See, e.g., Matter of Johnson, 756 F.2d 738, 740 (9th Cir.), cert. denied 474 U.S. 828, 106 S.Ct. 88, 88 L.Ed.2d 72 (1985); Matter of Ellis, 60 B.R. 432 (9th Cir. BAP 1985); Matter of Quality Electronics Centers, 57 B.R. 288 (Bankr.N.M. 1986) (inquiry at § 362 hearing is limited to whether creditor had a colorable claim to a perfected security interest). This conforms with the legislative history of § 362.

  3. In re Midway Airlines, Inc.

    167 B.R. 880 (Bankr. N.D. Ill. 1994)   Cited 9 times

    Questions of the validity and perfection of liens are not generally finally determined in a section 362(d) hearing because the issues are limited to the elements under section 362(d)(1) and (2), and whether the moving creditor has a colorable claim to a perfected security interest. In re Quality Electronics Centers, Inc., 57 B.R. 288 (Bankr.N.M. 1986). Moreover, hearings to determine whether the stay should be lifted are meant to be summary in character.

  4. In re Capodanno

    83 B.R. 285 (Bankr. E.D. Pa. 1988)   Cited 19 times

    The Movants require a substantial lump sum payment to adequately protect them from foreclosure by PSFS, which the Debtors are not offering. 3. The court should only concern itself with the issue of whether the Movants have "a colorable claim to a perfected security interest" and, finding same, should lift the stay on authority of In re Quality Electronics Center, Inc., 57 B.R. 288 (Bankr.D.N.M. 1986), the only citation appearing in the Movants' Brief. It is not surprising to discover that the Movants have seriously misread the Quality Electronics decision.

  5. Colvin v. Amegy Mortg. Co.

    507 B.R. 169 (W.D. Tex. 2014)   Cited 6 times
    Finding that jurisdiction existed in part because the plaintiff's avoidance claim arose post-confirmation, but involved pre-confirmation activities

    or counterclaims; instead, the proceedings simply involve a determination as to whether a creditor has a colorable claim to the property of the estate. Grella, 42 F.3d at 32 (citing Estate Constr. Co. v. Miller & Smith Holding Co., Inc., 14 F.3d 213, 219 (4th Cir.1994) (hearings to lift the stay are summary in character, and counterclaims are not precluded later if not raised at this stage); In re Vitreous Steel Prods. Co., 911 F.2d at 1232 (questions of the validity of liens are not at issue in a § 362 hearing, but only whether there is a colorable claim on property); In re Johnson, 756 F.2d 738, 740 (9th Cir.1985) (relief from stay hearings are limited in scope to adequacy of protection, equity, and necessity to an effective reorganization, and validity of underlying claims is not litigated); Nat'l Westminster Bank, U.S.A. v. Ross, 130 B.R. 656, 658 (S.D.N.Y.1991), (decision to lift stay does not involve determination of counterclaims, and thus those claims are not precluded later); In re Quality Elect. Ctrs., Inc., 57 B.R. 288, 290 (Bankr.D.N.M.1986) (relief from stay proceedings limited to whether the moving creditor has a colorable claim to a perfected security interest)). “If a court finds that likelihood to exist, this is not a determination of the validity of those claims [to the estate], but merely a grant of permission from the court allowing that creditor to litigate its substantive claims elsewhere without violating the automatic stay.”

  6. Hijjawi v. Five N. Wabash Condo. Ass'n

    491 B.R. 876 (N.D. Ill. 2013)   Cited 15 times
    Deciding that—while an appeal of a stay-relief order will often be mooted by a discharge—in that particular case there were aspects of the bankruptcy court's decision that had ongoing monetary effects that the district court could still remedy after the discharge

    Vitreous Steel, 911 F.2d at 1232 (citing In re Johnson, 756 F.2d 738, 740 (9th Cir.1985); In re Ellis, 60 B.R. 432 (9th Cir. BAP 1985); In re Quality Elecs. Ctrs., 57 B.R. 288 (Bankr.N.M.1986)). Hijjawi argues that the granting of her discharge does not affect the issue on appeal and that the Chapter 11 period debt “is either discharged and not enforceable or not discharged and enforceable.”

  7. Mission Prod. Holdings, Inc. v. Schleicher & Stebbins Hotels, L.L.C. (In re Old Cold, LLC)

    602 B.R. 798 (B.A.P. 1st Cir. 2019)   Cited 20 times
    Characterizing a "colorable claim" as one "that is legitimate and that may reasonably be asserted, given the facts presented and the current law"

    Questions of the validity of liens are not generally at issue in a § 362 hearing, but only whether there is a colorable claim of a lien on property of the estate." In re Vitreous Steel Prods. Co., 911 F.2d 1223, 1234 (7th Cir. 1990) (citation omitted); see also In re Harris, No. 17-31042-CJP, 2018 WL 6729689, at *5 (Bankr. D. Mass. Dec. 21, 2018) ("As a matter of law, the only issue properly and necessarily before a bankruptcy court during relief from stay proceedings is whether the movant creditor has a colorable claim; thus, a decision to lift the stay is not an adjudication of the validity or avoidability of the claim ....") (citation omitted); see also Grella, 42 F.3d at 34 ; In re Quality Elecs. Ctrs., Inc., 57 B.R. 288, 290 (Bankr. D.N.M. 1986) (stating that relief from stay proceedings are "limited to a determination [of whether] the moving creditor has a colorable claim to a perfected security interest"). Consequently, "the only issues necessarily decided at [a] § 362 hearing [a]re whether the [creditor] ha[s] a colorable claim of a lien and whether the amount of that lien exceed[s] the value of the property."

  8. Jane Powell, Individually, And, & Irvin Robinson, Receiver for Bee Jay's Hairstyling Acad., Inc. v. Yarbrough (In re Yarbrough)

    540 B.R. 647 (Bankr. E.D. Ark. 2015)

    1994); In re Vitreous Steel Prods. Co.,911 F.2d 1223, 1234 (7th Cir.1990); In re Quality Elecs. Centers, Inc.,57 B.R. 288, 290 (Bankr.D.N.M.1986)). Although the parties dispute the enforceability of the note and mortgage, the Movants and Mr. Yarbrough acknowledge the existence of a mortgage on the Debtors' Residence in favor of Bee Jay's and the existence of a note related to the mortgage.

  9. In re Cultural Assets 1, LLC

    No. 11-12-13793-s11 (Bankr. D.N.M. Dec. 14, 2012)

    The limited grounds set forth in the statutory language, read in the context of the overall scheme of § 362, and combined with the preliminary, summary nature of the relief from stay proceedings, have led most courts to find that such hearings do not involve a full adjudication on the merits of claims, defenses, or counterclaims, but simply a determination as to whether a creditor has a colorable claim to property of the estate.Id. at 32, citing among other cases In re Quality Elect. Ctrs., Inc., 57 B.R. 288, 290 (Bankr.D.N.M.1986) (relief from stay proceedings limited to whether the moving creditor has a colorable claim to a perfected security interest). In consequence, a hearing on the alleged bad faith of the chapter 11 filing, even if only made on a preliminary or colorable basis, is best left to another day when the issue can be fully developed and litigated, particularly since the Court does not need to resolve the issue in order to decide the Motion.

  10. In re Martinez

    455 B.R. 755 (Bankr. D. Kan. 2011)

    These rights provide sufficient bases for this Court to grant relief from stay to Countrywide to allow it to pursue foreclosure in state court, just as it held in its original decision.B. Plaintiff has failed to establish that the Court erred in holding that the Kansas Court of Appeals' decision in MortgageElectronic Registration Systems, Inc. v. Graham,was not resjudicata on the issue of whether MERS was an agent of Countrywide at all times relevant to this case.Matter of Vitreous Steel Products Co., 911 F.2d 1223, 1234 (7th Cir. 1990) (holding that questions of the validity of liens are not generally at issue in a 11 U.S.C. § 362 relief from stay hearings, but only whether there is a colorable claim of a lien on property of the estate) (citing Matter of Quality Elec. Ctrs., 57 B.R. 288 (Bankr. N.M. 1986)). 44 Kan. App. 2d 547.