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Chapter 11
Chapter 11 Claims and Interests
The filing of proofs of claims or interests, and the
allowance of secured claims are accorded special treatment in a Chapter
11 case.
Proofs of claims or interests: In a Chapter 11 case, the court fixes
(and sends notice of) a bar date, which operates as a deadline for
proofs of claims or interests. However, a claim or interest that is
listed in the schedules filed by the bankruptcy debtor is deemed filed (for the
scheduled amount), unless it is scheduled as disputed, contingent, or
un-liquidated. Therefore, in a Chapter 11 case, the holder of a
correctly scheduled, undisputed, non-contingent, liquidated claim or
interest is not required to file a proof of claim or a proof of
interest.
Secured Claims
In a Chapter 11 case, both recourse and non-recourse secured claims are treated as recourse claims for the purpose of allowance. Bankruptcy Code § 1111 (b)( 1 )(A). Thus, while an under-secured creditor holding a non-recourse claim, either under an agreement or under applicable non-bankruptcy law, ordinarily cannot assert a deficiency claim for the portion of her claim exceeding the value of the collateral, the creditor is given recourse status under Chapter 11, with the effect being that the unsecured part of the claim will not be disallowed under Bankruptcy Code section 502(b)(1).(1) Example: Creditor holds a $500,000 claim secured by a first mortgage on commercial real property, which is valued at $400,000. The agreement between Creditor and bankruptcy Debtor provides that Creditor's claim is non-recourse, which means that Creditor may not seek a personal judgment against Debtor for any deficiency. Debtor files a Chapter 11 bankruptcy petition. Under section 1111(b)(1)(A), Creditor's claim will be treated as if it were a recourse claim, and thus the $100,000 deficiency will be allowed as a general unsecured claim. (Note that, absent this provision, the unsecured portion of Creditor's claim would not be allowable under section 502(b)(1) because of its non-recourse character.) Of course, Creditor also holds an allowed secured claim in the amount of $400,000 Bankruptcy Code §506(a).
(2) Exceptions: There are a few situations in which a claim is not treated as if the holder has recourse, thus barring any unsecured claim for a deficiency:
(a) If the creditor does not have recourse, and the property is sold either under Bankruptcy Code section 363 or under the plan of reorganization [B.C. §1111(b)(1)(A)(ii)];
(b) If the creditor does not have recourse and, during the case (i) the collateral is abandoned or returned to the secured creditor, or (ii) the secured party forecloses on the property after having been granted relief from the automatic stay or;
(c) If the class to which the claim belongs makes the section 1111 (b) election by at least two-thirds in amount and more than half in number.
Temecula, California
Temecula is bordered by Murrieta on the northwest and the Pechanga Indian Reservation on the south, with unincorporated areas of Riverside County on all of its other borders. It is served by the Interstate 15 (Temecula Valley Freeway) and Interstate 215, along with State Route 79 (Temecula Parkway).
With neighboring Murrieta, Temecula forms the southwestern anchor of the Inland Empire region. It is almost equidistant to San Diego and Orange County, California; many residents consider themselves as living in a suburb of one of the two. Temecula is also home to many military families from nearby MCB Camp Pendleton, MCAS Miramar, March Air Reserve Base and the Navy bases in San Diego.
Dirtbiking/offroading is a very popular pastime in the town.
The Pacific Bankruptcy Center is a debt relief agency, assisting the residents of Temecula California in filing for relief under the United States Bankruptcy Code.
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