In Re Buena Vista Oceanside, LLC

479 B.R. 342 (2012)

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Nature of the Case

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Facts

P owns and operates two Properties with 22 total units between them. On November 30, 2005, D made a loan to P in the amount of $4,368,000 evidenced by a Promissory Note executed in favor of D. D held a Mortgage Deed and Security Agreement. P granted D a first priority mortgage lien on the Properties. P filed Chapter 7 on July 20, 2011. On August 8, 2011, this court entered an order converting this case to chapter 11. P is in possession of its assets and managing its affairs pursuant to 11 U.S.C. §§ 1107 and 1108. On September 1, 2011, D filed a Proof of Claim in the amount of $4,977,984.70. P filed a Motion for Valuation of Secured Claim and Avoidance of Lien. The court ordered that P and D each obtain an appraisal on the fair market value of the two hotels. P retained Jesse Vance who rendered an opinion on the market value of the Buena Vista as $770,000. P also used the opinion of Ronald Ames who rendered separate opinions on the market value of the Buena Vista as $750,000 and the Courtyard Villa as $805,000. D retained Lawrence Pendleton who valued Buena Vista as $1,950,000 and the Courtyard Villa as $1,425,000. P asserts that the collective value of the Properties is $1,690,000 and D claims that the value is $3,375,000. The three experts are all MAI-certified appraisers. All three appraisers used the Sales Comparison Approach and the Income Capitalization Approach. They all agreed that the Cost Approach was not appropriate for this case.