In re Tapang

MEMORANDUM DECISION RE: INTEREST RATE

In this Chapter 11 case, the Court has been asked to determine whether to cram down the interest rate on a loan pertaining to real property located at 523 Burlingame Avenue in Capitola, California (the “Property”). At trial, Esterlita Cortes Tapang (“Debtor”) whs represented by Francisco Aldana, and Creditor 523 Burlingame LLC (“Creditor”) was represented by David Wiseblood. 2 The parties have asked the Court to determine this issue for plan confirmation purposes. This decision determines that the interest rate on Creditor’s secured claim for plan confirmation purposes is 5%.

Debtor’s counsel had advised the Court multiple times that Debtor intended to file a fourth amended plan and disclosure statement once the Court issued a ruling on the. cram down interest rate. Instead, Debtor filed a fourth amended plan and disclosure statement on October 27, 2015. The fourth amended plan provides for an interest rate of 4.25% on Creditor’s loan. Such interest rate is different from the rate Debtor proffered at trial.

Debtor contended at trial that a fixed interest rate of 5%, which consists of a 3.25% prime rate and a 1.75% risk premium, is…