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When Can a Tax Deed Sale Be Held After a Debtor Files Chapter 11 Bankruptcy

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  • 08-28-2014, 09:19 AM
    bio_reef
    When Can a Tax Deed Sale Be Held After a Debtor Files Chapter 11 Bankruptcy
    My question involves bankruptcy (chapter 11) in the state of: california

    Is automatic stay lifted once a plan is confirmed in a Chapter 11 case?
    If so, is tax deed sale valid if it occurs two months after a plan is confirmed in Chap 11 bankruptcy (filed in CA)?
    If yes, do they have any standing arguments to void/revert the sale within the 1 year statute of limitation (in california)?

    Timeline of event:
    -A county NOD was filed after a chapter 11 filing.
    -A plan confirmation was accepted and ordered 2 years later.
    -A tax deed sale occurred 2 months later.

    Thanks a million,
    -Nick
  • 08-28-2014, 11:36 AM
    flyingron
    Re: When Can a Tax Deed Sale Be Held After a Debtor Files Chapter 11 Bankruptcy
    Are these post-petition taxes that were not paid?
  • 08-28-2014, 06:11 PM
    bio_reef
    Re: When Can a Tax Deed Sale Be Held After a Debtor Files Chapter 11 Bankruptcy
    Pre-petition taxes.

    Please help!
  • 08-28-2014, 07:42 PM
    despritfreya
    Re: When Can a Tax Deed Sale Be Held After a Debtor Files Chapter 11 Bankruptcy
    Did the confirmed Chapter 11 Plan provide for proper payment of the property taxes? Did the County file a Proof of Claim? Did the County obtain stay relief at some point?

    The Confirmation Order for a Chapter 11 Plan, unless it states otherwise, does not cause the lifting of the automatic stay. The Order is binding upon the debtor and the creditors as it relates to pre petition debt. We cannot guess at what that Order provides for therefore, if you fear a sale of some sort, pull the Order and review it to find out how the creditor is being treated. If the property tax is provided for and the stay has not been lifted, pull the County's Proof of Claim and call whoever signed it and ask what's going on. Or, better yet, talk to your attorney (assuming you had one).

    If the foreclosure of the tax certificate (divesting you of ownership)was improperly held because the stay had not been lifted, it is simply void. (Google "In re Schwartz".)


    Des.
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