In Re Davenport

CORRECTED MEMORANDUM OF DECISION RE: CONFIRMATION OF DEBTORS’ THIRD AMENDED PLAN

This matter came before the court on the requested confirmation of debtors’ third amended Chapter 12 plan of arrangement and the objections of Western Farm Credit Bank and Sierra-Bay Federal Land Bank Association thereto.

FACTS AND BACKGROUND

Sierra Bay Federal Land Bank Association (“Bank”) objections to confirmation focus on treatment of its secured claim. Bank’s secured claim arises from a loan note which had an outstanding balance of $469,245.00 at commencement of debtors’ chapter 12 case. Bank's note is secured by (1)a first deed of trust on 24.22 acres of farm land, including debtors’ residence, which by final order of the court, has a fair market value of $354,462.00; (2) a security interest in a note executed by Wayne and Nina Cheung in favor of the debtors in the amount of $47,985.14; and (3) a lien granted by law on class B/C Bank stock which debtors were required to purchase to acquire the loan from Bank.

Debtors’ plan allows Bank’s claim secured status in the amount of $402,447.14, being the real property value of $354,-462.00, plus the value of the Cheung note receivable in the amount…