Bankruptcy Court Rules That Pre-Petition Stay Waiver Can Be Considered In Determining "Cause" For Relief From Stay
Wolfson Bolton Kochis
The United States Bankruptcy Court for the Eastern District of Wisconsin held that a pre-petition stay waiver in favor of debtor's lender is a factor to be considered in determining "cause" for relief from the automatic stay under 11 U.S.C. 362(d)(1). The case is In re 4848, LLC, 490 B.R. 343 (Bankr. E.D. Wis. 2013). Debtor 4848, LLC was a single asset real estate debtor that had filed a Chapter 11 bankruptcy. Pre-petition, debtor entered into a forbearance agreement with its lender that included a stay waiver in favor of lender in the event that 4848, LLC filed for bankruptcy protection. Following debtor's bankruptcy filing and the filing of a proposed plan of reorganization, debtor's lender moved for relief from the automatic stay to continue foreclosure proceedings. In granting the lender's motion for relief from the automatic stay, the Court held that while the pre-petition stay waiver is not the only consideration in determining "cause" for relief from stay, it is a factor to be considered, especially where, as here, the debtor had gained a "considerable advantage from the forbearance agreement and the waiver . . . ."