Major U.S. Supreme Court Bankruptcy Case

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January 2015

Mentioned

Recently, the United States Supreme Court agreed to hear a case, Bank of America, N.A. v. Caulkett, in which a lower court voided a junior (second) lien because the court believed there was not enough value in the property to pay anything to the junior mortgagee at the time when the mortgagor filed bankruptcy. If allowed to stand, the lower court decision would remove liens and not give the lienholder any chance to recover money if the property appreciated in the future. On behalf of the Community Banker Association of Illinois, SmithAmundsen filed a “friend of the court” (amicus curiae) brief asking the Supreme Court to reverse the lower court and to hold that the second lien is not voided but may pass through bankruptcy unaffected and take advantage of any future appreciation in property value. Click the link below to see a copy of the brief. Oral argument has not yet been scheduled, but will take place in the late spring with a decision expected over the summer.

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