In re: Daufuskie Island Properties, LLC aka Daufuskie Island Resort and Breathe Spa, Debtor., 441 B.R. 60

Summary

A claimant asserted the right to credit bid at the auction. The court held that the claimant could not credit bid his asserted mortgage under 11 U.S.C.S. § 363(k) because the mortgage and claim were disputed. Even if he were allowed to credit bid, he could not credit bid in the manner he proposed because his proposal did not provide for paying off all mortgages senior to his asserted mortgage. The court also held that the credit bid purchasers were responsible for payment of the auction fee to the auction company at the closing of the sales to them, as a cost of sale. Following the court's announcement of its rulings on the above issues at the hearing, the court conducted the second round of the auction, for credit bidding. The property offered for sale consisted of two groupings of property: the property securing a bank's (BNC) loan (BNC Collateral), and the property securing another creditor's (AFG) loan (AFG Collateral). The court found that BNC was the successful credit bidder for ...