In Re Panther Mountain Land Development, LLC

438 B.R. 169 (2010)

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Nature of the Case

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Facts

On September 20, 2009, P filed Chapter 11. One day later D filed its first Motion for Relief from Stay. D requested relief from the stay with regard to two separate properties: Sunset Lake Estates and Panther Mountain Estates. The Court denied the motion. On April 26, 2010, D filed a second Motion for Relief. D also filed its Motion for Valuation. Also on August 23, 2010, prior to the conclusion of the evidentiary hearing on the present Motion for Relief and Motion for Valuation, D filed a third Motion for Relief from Stay of Single Asset Real Estate. D requests relief from the automatic stay with regard to the Sunset Lake and Panther Mountain properties. On September 23, 2010, while the decision on the current motion was under advisement and the Third Motion for Relief had yet to be heard, D filed a fourth Motion for Relief from Automatic Stay. P was formed for the purpose of managing the development of two tracts of real estate. Sunset Lake is an approximately 126-acre tract of land. This property is currently held in the form of vacant, undeveloped acreage and is zoned for both residential and commercial use. P is under a Real Estate Purchase Agreement (to sell 45 acres of the Sunset Lake property to ERC Land Development Group, L.L.C. The purchase price of the acreage property is $600,000.00, or $13,333.00 per acre. Panther Mountain is a 79-acre tract. It is a developed subdivision, consisting of a total of 25 residential lots and an approximately 15-acre tract of undeveloped land. P had sold eight of the original 25 lots prior to filing this bankruptcy case. Both properties are listed for sale with a real estate agent. D's first note is for $975,000.00 and the second for $858,000.00, both with interest accruing at a rate of 8.75%. D filed a foreclosure action on both of the properties on November 4, 2008. As of filing P owed $1,206,736.65 and $689,442.11. The appraisal of the Sunset Lake acreage property valued the property at $1,134,000.00 as determined by a sales comparison method. As to the 17 unsold lots in the Panther Mountain subdivision, D's appraisal found the value to be $480,000.00 using the income capitalization approach. The appraiser, McIntosh, testified as an expert for D. McIntosh confirmed that the adjustments he made to the prices of the other sales comparisons were completely subjective. The Sunset valuation was based on the premise that the entire 126 acres would be sold in one bulk transaction. The Panther Mountain appraisal failed to take into account the 15-acre tract of undeveloped land. Dana Kellerman and Gayle Odom both testified as witnesses for P. They presented actual evidence of comparable sales that differed dramatically from D’s appraisals. They discussed the current efforts to market and sell the properties. P presented four exhibits to show that there was equity in the property. D's calculations] reached the opposite conclusion.