 |
|
IN THE SPOTLIGHT
|
| | Norman E. Greenspan, Esq. |
|
Norman concentrates his practice in complex commercial and corporate litigation, and white collar criminal defense. Before joining Starfield & Smith,Norman was an equity partner in the Philadelphia office of a national law firm where he served as chairman of the litigation department and was a member of the firm's executive committee. He successfully represented many high profile clients in civil, criminal and administrative litigation matters and has tried over 60 cases to judgment. Norman's clients have included public and privately held entities, and individuals. He serves a wide range of clients in areas such as: contracts; creditor's rights; false claims act; government investigations; internal corporate investigations; financial services; securities; corporate governance; intellectual property; antitrust; real estate; restrictive covenants; class actions; bank fraud; tax; healthcare fraud; environmental; government contracts; and business fraud.
ADMISSIONS:
- Pennsylvania
- Supreme Court of the United State
- U.S. District Court - Eastern District of Michigan
- U.s. District Court - Eastern and Middle Districts of Pennsylvania
- U.S. District Court - Northern District of Illinois
- U.S. Court of Appeals for the Third Circuit
To read more about Norman, click here.
| |
|
|
|
Starfield & Smith, PC is on LinkedIn!
Link yourself to Starfield & Smith to receive updates, articles and news pertaining to SBA and lending related topics.
|
|
Find us on Facebook!
Become our fan on Facebook to receive updates, articles and news pertaining to SBA and lending related topics.
|
|
|
|
FEATURED ARTICLE
Best Practices: U.S. Supreme Court Ends Lien Stripping of Junior Mortgages in Liquidation Cases
By: Victor Diaz, Esquire
"There's no getting blood out of a turnip." Captain Frederick Marryat
A recent line of cases by the Court of Appeals for the Eleventh Circuit held that second-priority mortgage liens could be eliminated completely as part of a liquidation under Chapter 7 of the Bankruptcy Code where the collateral is worth less than the amount owed under the first mortgage, i.e. "underwater." In re Caulkett, 566 Fed. Appx. 879 (2014) (per curiam); In re Toledo-Cardona, 556 Fed. Appx.911 (2014) (per curiam). The practice, commonly known as "lien stripping," allows a debtor in bankruptcy to void a junior mortgage if the mortgage is underwater - a reality not uncommon during the recent financial crisis. These cases had a detrimental impact on commercial lenders, including those participating in SBA loan programs, who rely heavily on junior mortgage liens as part of their secondary collateral and to comply with SBA's collateral requirements.
Section 506(d) of the Bankruptcy Code states, "[t]o the extent that a lien secures a claim against the debtor that is not an allowed secured claim, such lien is void." Debtors persuaded federal bankruptcy courts to conclude that if the value in the collateral was insufficient to satisfy the first mortgage lienholder, then second position lienholders were in effect "unsecured" creditors. The Eleventh Circuit on appeal affirmed the holdings of the lower bankruptcy courts.
This past summer, in a unanimous decision, the United States Supreme Court reversed the ruling of the Eleventh Circuit. Bank of America, N.A. v. Caulkett, 135 S.Ct. 1995 (2015). Relying on the Court's prior decision in Dewsnup v. Timm, 502 U.S. 410 (1992), the Court held that a debtor in a liquidation proceeding may not void an underwater mortgage on the basis that the value of the property is not sufficient to cover the claim. The Supreme Court reasoned that while portions of the Bankruptcy Code suggests that "underwater mortgages" are "unsecured claims" inasmuch as the value of the collateral is less than the amount of the claim, for purposes of "voiding" or "stripping down" a junior mortgage, the term "secured" means a claim supported by a valid security interest in the property, regardless of whether the value of that property would be sufficient to cover the claim. Id.
Speaking for the Court, Justice Thomas concluded:
"[a] debtor in a Chapter 7 bankruptcy proceeding may not void a junior mortgage lien under §506(d) when the debt owed on a senior mortgage lien exceeds the current value of the collateral." Id.
Recent history demonstrates real estate values can fluctuate and indeed decline. The Supreme Court's decision provides respite to weary lenders who had little by way of recourse when the equity in their collateral diminished. For more information on secondary collateral issues, please contact Victor at 407-667-8811 or at vdiaz@starfieldsmith.com.
|
EVENTS & SEMINARS 
Date: October 8, 2015
Location: The Meadows Racetrack Casino, Washington, PA
For more information about this event and/or to register, click here.
Date: November 2, 2015 - November 6, 2015 Location: The Cosmopolitan of Las Vegas
For more information about this event and/or to register, click here.
Date: November 5, 2015
Location: The Cosmopolitan of Las Vegas
For more information about this event and/or to register, click here.
Date: November 5, 2015 - November 6, 2015 Location: The Cosmopolitan of Las Vegas
For more information about this event and/or to register, click here.
|
Fredda K. Morgan / SBA Administrator / Green Bank
I have known and worked with David Starfield and Ethan Smith since the mid 90's. The SBA market has seen many changes over the years and in every aspect of my association with them, from processing to liquidation, they and their firm have proven to be experienced, knowledgeable and professional. I wouldn't be where I am today without them showing me the way. I refer anyone to them that is in need of their services.
|
|
|
|
|
