Can Payment To A Fully Secured Mortgagee Be A Preference?

Law360, New York (February 5, 2014, 12:36 PM EST) -- Surprisingly, the answer may be “yes.”

If you follow the reasoning of a recent bankruptcy case, a payment to a fully secured first mortgagee may be recovered from the first mortgagee, or possibly even a second mortgagee. In Gladstone v. Bank of America (In re Vassau), 499 B.R. 864 (Bankr. S.D. Cal. 2013), the Bankruptcy Court for the Southern District of California held that a payment made on a fully secured first mortgage was a preference recoverable from an undersecured junior mortgagee whose equity in the...
To view the full article, register now.

UK Financial Services

UK Financial Services

Read Our Latest UK Financial Services Coverage

Financial Services Law360 UK provides breaking news and analysis on the financial sector. Coverage includes UK and European Union policy, enforcement, and litigation involving banks, asset management firms, and other financial services organizations.