United States District Court, D. Arizona
In re: Kyle Parker, Debtor.
CSFB 2005-C3 Payson Homes, LLC; Jean Glover, Appellees. Kyle Parker, Appellant, Bk. No. 14-BK-01941-GBN
Neil V. Wake United States District Judge
Kyle Parker appeals from two bankruptcy court orders in a Chapter 11 case. The first determined the value of real property pursuant to 11 U.S.C. § 506(a). The second granted relief from automatic stay pursuant to 11 U.S.C. § 362(d). For the reasons that follow, the first order will be affirmed, and the appeal from the second order will be dismissed for lack of jurisdiction.
Parker owns several neighboring parcels of land, on which he operates a profitable mobile home park. (ER 128-29.) One parcel contains mobile home spaces that are rented to park residents (“the renters parcel”). (ER 129.) Other parcels provide amenities to park residents such as water, sewage treatment, storage, and postal facilities. (Id.) Each parcel plays a part in the larger going concern.
In 2014, Parker filed a Chapter 11 bankruptcy petition and reorganization plan. (ER 128, 187.) Under the reorganization plan, Parker would continue to operate the park as a going concern, to generate income to pay creditors’ claims. (ER 187.) As before, the income would be generated by renting units on the renters parcel.
One of the creditors was Payson Homes, LLC (“Payson Homes”). (ER 189.) Payson Homes’ claim was secured by a lien on the renters parcel. (ER 129, 189.) Parker’s reorganization plan would have him making monthly payments to Payson Homes based on the value of the renters parcel. (ER 193.)
In April 2015, the bankruptcy court held an evidentiary hearing to determine the value of the renters parcel. (ER 204.) At the hearing, Payson Homes and Parker offered competing expert appraisals.
Payson Homes’ expert testified that the renters parcel had a “standalone fair market value” of $2, 660, 000. (ER 219.) His methodology assumed a buyer would use the parcel as a standalone mobile home park, not as part of the larger going concern. (ER 219, 238-42.) He reached the $2, 660, 000 figure by estimating the income likely to be produced by the parcel as a standalone park and then subtracting the costs of improving and maintaining it. (ER 242-44.) He also noted comparable properties were selling for similar prices. (ER 249-56.)
In contrast, Parker’s expert testified that the renters parcel had an “as-is market value” of $255, 000. (ER 400-01.) His methodology assumed a buyer would hold the parcel as vacant land, for possible future residential development or mobile home park development. (ER 405-07.) He reached the $255, 000 figure by estimating the value of the land as if it had no mobile home park improvements and then subtracting the costs of demolishing the already-existing improvements. (ER 405.)
In June 2015, Payson Homes moved to lift the automatic stay triggered by Parker’s bankruptcy petition. (SER 1-2.) In July 2015, the bankruptcy court held another evidentiary hearing on the value of the renters parcel. (ER 452-53.) No further expert appraisals were offered at that hearing.
In August 2015, the bankruptcy court heard argument on the value of the renters parcel and on Payson Homes’ motion to lift the automatic stay. (ER 746-47.) As to the renters parcel, the court rejected Parker’s expert’s methodology and deemed the $255, 000 figure irrelevant. (ER 751.) The court accepted Payson Homes’ expert’s methodology but determined that he underestimated how much it would cost to make a standalone mobile home park. (ER 754-55.) The court estimated it would cost another $1 million, making the correct valuation $1, 660, 000, not $2, 660, 000. (Id.) Accordingly, the court decided Parker’s reorganization plan could not be confirmed as written. (ER 800.)
As to the automatic stay, the court noted that this “2014 case” was aging and doubted whether Parker could “realistically” work with the court’s $1, 660, 000 valuation. (Id.) The court decided the stay would be lifted unless Parker could confirm a new, binding reorganization plan. (ER 800-01.)
The court published these decisions in two short written orders on September 15 and 25, 2015. In the first (the “Valuation Order”), the court valued the renters parcel at $1, 660, 000, denied confirmation of Parker’s plan, and ordered Parker to use the $1, 660, 000 value in any amended plan. (SER 278-79.) In the second (the “Stay-Relief Order”), the court granted Payson Homes’ motion to lift the automatic stay and ordered “the automatic stay is lifted as of 5:00 p.m. on Friday, November 27, 2015, unless [Parker] confirms a plan that binds [Payson Homes] or the ...