James P. Stewart, Trustee of the James P. Stewart and Jeanne F. Stewart Trust v. Phillip S. Gurley Dba Modoc Rock
Opinion
Opinion
Phillip S. Gurley, a debtor in bankruptcy, appeals the district court’s decision affirming the bankruptcy court’s order granting Stewart relief from the automatic bankruptcy stay under 11 U.S.C. § 362 (d). Gurley challenges the bankruptcy court’s conclusion that he lacks “equity,” within the meaning of 11 U.S.C. § 362 (d)(2)(A), in an encumbered apartment complex upon which Stewart seeks to foreclose.
We affirm the district court’s decision because the bankruptcy and district courts properly defined “equity” as the difference between the property value and the total amount of liens against it. They properly rejected a minority view of bankruptcy courts which had looked only to the difference between the value of the property and the value of the lien held by the party seeking to dissolve the stay and more senior liens.
On December 24, 1980, Gurley executed two trust deeds for an eleven unit apartment complex naming James P. Stewart as beneficiary. The trust deeds were executed to secure payment of promissory notes totalling $202,500. Gurley executed a third trust deed securing a $70,000 debt to the Bank of Newport, and a fourth trust deed securing a $150,000 debt to Norma…