In Re Cimarron Investors, Debtor. Cimarron Investors v. Wyid Properties

Cimarron Investors (Cimarron) appeals the Bankruptcy Appellate Panel’s affirmance of the bankruptcy court’s order modifying the automatic stay. We reverse in light of the Supreme Court’s recent decision in United Sav. Ass’n v. Timbers of Inwood Forest Assoc., Ltd., — U.S. — , 108 S.Ct. 626 , 98 L.Ed.2d 740 (1988).

I.

FACTS AND PROCEEDINGS BELOW

Cimarron is a limited partnership whose only asset was a 120-unit apartment complex in Glendale, Arizona. WYID Properties (WYID) was a secured creditor of Ci-marron. WYID is the holder of a note secured by a deed of trust against the property in the amount of $2.1 million.

In January 1986, Cimarron defaulted on its payments under the note and WYID instituted foreclosure proceedings against the property. On May 29, 1986, Cimarron filed a voluntary Chapter 11 petition in bankruptcy. Under 11 U.S.C. § 362 (a), filing of the petition constituted an automatic stay of the foreclosure proceedings. On July 24, 1986, WYID filed a motion for relief from the automatic stay. In the course of the hearing on the motion the bankruptcy court found that the value of the property “as is” was $2.5 million and that WYID was by this time owed $2.42 million.…