UNITED SAVINGS ASSOCIATION OF TEXAS V. TIMBERS OF INWOOD FOREST ASSOCIATES, LTD.
484 U.S. 365 (1988)
NATURE OF THE CASE: United (P), unsecured creditor, appealed an en banc decision holding that P was not entitled to receive from Timbers (D), monthly payments for the use value of the loan collateral which the bankruptcy stay prevented P from possessing.
FACTS: D executed a note in the principal amount of $4,100,000. P is the holder of the note as well as of a security interest created the same day in an apartment project owned by D. The security interest included an assignment of rents from the project. D filed Chapter 11. P moved for relief from the automatic stay of enforcement of liens triggered by the petition claiming that there was lack of 'adequate protection' of its interest within the meaning of 362(d)(1). D owed $4,366,388.77, and the value of the collateral was somewhere between $2,650,000 and $4,250,000. P was an undersecured creditor. D had agreed to pay the post petition rents from the apartment project minus operating expenses. P contends it is entitled to additional compensation. The Bankruptcy Court agreed and it conditioned continuance of the stay on monthly payments by D. D appealed and the District Court affirmed but the Fifth Circuit en banc reversed. It was agreed that the complex was appreciating in value.
ISSUE:
RULE OF LAW:
HOLDING AND
DECISION:
LEGAL ANALYSIS:
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