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Huntington National Bank v. Saint Catharine College, Inc.

United States District Court, W.D. Kentucky, Louisville Division

December 16, 2016

THE HUNTINGTON NATIONAL BANK, AS TRUSTEE, Plaintiff,
v.
SAINT CATHARINE COLLEGE, INC., et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          David J. Hale, Judge.

         After Defendant Saint Catharine College (SCC) closed its doors, Plaintiff Huntington National Bank filed this suit seeking to recover its debts. Huntington National Bank and Receiver LS Associates have moved the Court to approve the sale of two pieces of real property. (D.N. 27; D.N. 32) Because the Court finds that the statutory requirements have been met and the sale is in the best interests of the estate, the Court will grant both motions.

         I. BACKGROUND

         Plaintiff Huntington National Bank and Receiver LS Associates have filed two joint motions for the sale of real property. (See D.N. 27; D.N. 32) The first requests approval of the sale of a 3-bedroom, 2-bathroom home located at 3161 Bardstown Road, Springfield, Kentucky. (D.N. 27-1) The PVA Valuation of the home is $101, 000. (Id., PageID # 461) Additionally, LS Associates retained three independent appraisals, which all valued the property at $120, 000. (Id., PageID # 466) The initial listing price for the property was $125, 000, and the proposed sale price is $114, 000. (Id, PageID # 462)

         The second motion requests approval for the sale of 2-bedroom, 2-bathroom property located at 2670 Bardstown Road, Springfield, Kentucky. (D.N. 32-1, PageID # 544) While the property was originally intended to be a residential home, St. Catharine College used the property as a clinic. (Id.) The PVA Valuation of the home is $84, 000. (Id.) LS Associates also retained three independent appraisals, and the property was valued at $138, 000; $140, 000; and $140, 000. (Id., PageID # 549) The initial listing price was $155, 000, and the proposed sale price is $115, 000. (Id., PageID # 544)

         LS Associates retained the three appraisers by requesting a list of appraisers from the local county Commissioner's office. (D.N. 61, PageID # 827) From the list provided, LS Associates hired Charles Langford, Charles Polin, and Ralph Blandford. (Id.) LS Associates also published notice of the sales in the local weekly newspaper, The Springfield Sun. (D.N. 54; D.N. 63) The notification was initially published in hard copy on October 12, 2016, and October 19, 2016, and was available online. (D.N. 54; PageID # 757)

         The Court heard argument on the two motions on November 9, 2016. (D.N. 58) Following the hearing, the Court issued an Order requiring LS Associates to publish the terms of the sale in the online version of The Springfield Sun for ten consecutive days, and to submit the professional qualifications of the appraisers. (Id.) LS Associates complied with the Court's order and submitted the qualifications of the appraisers (D.N. 61) and notified the Court that notice of the sales appeared on the website of The Springfield Sun for at least ten consecutive days. (D.N. 63-1, PageID # 849) In addition, notice of the sales was published in the hard-copy version of The Springfield Sun on November 16, 2016, and November 23, 2016. (Id.)

         In response to the these motions for sale of real property, Intervenor Defendant Farmers National Bank argues that (1) the motions should be denied because the Court lacks subject matter jurisdiction; (2) the motions should be denied because they are not in compliance with 28 U.S.C. § 2001; and (3) if the sale is confirmed, the proceeds should be marshaled. (D.N. 36) The Court has previously addressed Farmers' argument about subject matter jurisdiction so it will not be addressed here. (See D.N. 45; D.N. 57)

         Huntington National Bank and LS Associates contend that the sale complies with the requirements set forth in 28 U.S.C. § 2001, and argue that marshaling should not be applied in this case. (See D.N. 46; D.N. 47; D.N. 48)

         II. DISCUSSION

         A. Compliance With 28 U.S.C. § 2001

         The sale of real property in this situation is governed by 28 U.S.C. § 2001. Section 2001(b) provides

After a hearing, of which notice to all interested parties shall be given by publication or otherwise as the court directs, the court may order the sale of such realty or interest or any part thereof at private sale for cash or other consideration and upon such terms and conditions as the court approves, if it finds that the best interests of the estate will be conserved thereby. Before confirmation of any private sale, the court shall appoint three disinterested persons to appraise such property or different groups of three appraisers each to appraise properties of different classes or situated in different localities. No private sale shall be confirmed at a price less than two-thirds of the appraised value. Before confirmation of any private sale, the terms thereof shall be published in such newspaper or newspapers of general circulation as the court directs at least ten days before confirmation. The private sale shall not be confirmed if a bona fide offer is made, under conditions prescribed by the court, which guarantees at least a 10 per centum increase over the price offered in the private sale.

         In this case, § 2001 is satisfied. Receiver LS Associates secured three disinterested persons to appraise the properties, and the Court adopts their appraisals. (D.N. 27; D.N. 32; D.N. 63) The sale price in both cases is well over two-thirds of the appraised value, and the parties do not contest the sale price of either property. (D.N. 27-1, PageID # 466; D.N. 32-1, PageID # 549) The hearing held on November 9, 2016, satisfied the hearing requirement. (D.N. 58) Finally, as ordered by the Court, the terms of the sale were published in a local newspaper for at least ten consecutive days prior to the Court's confirmation of the sale, and no bona fide offer was reported. (D.N. 63) See Huntington Nat. Bank v. JS & P, L.L.C., No. 2:13-CV-13841, 2014 WL 4374355, at *2 (E.D. Mich. Sept. 4, 2014) (“[B]efore confirming a sale, the Court must direct that the terms of the sale be published in a newspaper of general circulation at least ten days before confirmation of the sale.”); PNC Bank, N.A. v. Gator Piqua Partners, LLLP, No. 3:12-CV-369, 2013 WL 6383080, at *2 (S.D. Ohio Dec. 5, 2013) (“. . . the terms of ...


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