Court-Ordered Liquidation Begins At ITT Tech
Two New York-based companies will oversee the sale of the college’s thirty owned properties and 111 leases in Indiana and thirty-eight other states.
A&G Realty Partners LLC expects a “high level of interest in the properties” since they “are well-built buildings in excellent condition, with good ceiling height and above-average parking, which can be used for flex, office, retail, health-related facilities, and schools;” the companies are also auctioning off the school’s intellectual property. Since the auction sale is as-is, buyers can elect whether or not to include furniture, equipment, and any other contents still inside the properties. ITT Tech filed bankruptcy in the Southern District of Indiana in September 2016, shortly after the U.S. Department of Education said it would no longer provide financial assistance due to accreditation issues.
A&G is the same firm that handled the Sports Authority bankruptcy liquidation earlier this year.
Exempt Assets in Bankruptcy
Debtors in the Hoosier State must use the exemptions listed in Title 34 of the Indiana Code, and they are valid in both Chapter 7 and Chapter 13 bankruptcies. Some common exemptions are:
- – House: Joint debtors can exempt up to $35,200 in home equity; moreover, all interest in a tenancy of the entirety is exempt.
- – Retirement Accounts: The United States Supreme Court recently ruled that earned IRAs, 401(k)s, pension plans, and other retirement vehicles are 100 percent exempt regardless of value.
- – Personal Property: Most all household items, from furniture to clothes to electronics to tools, are exempt.
- – Payments: Insurance proceeds, unemployment benefits, and workers’ compensation benefits are exempt.
- – Wildcard: Debtors can exempt up to $9,350 in motor vehicle equity or other property regardless of whether it is normally exempt.
When valuing assets in Schedules A and B, the debtor must list the as-is cash value. For example, a home’s as-is cash value is usually about 60 percent of the fair market value. Assume the debtor has a $200,000 house with an unpaid principal balance of $150,000. Arguably, the as-is cash value is about $120,000. So, whereas the debtor would have $50,000 of equity in a list sale at fair market value, the debtor is underwater in an as-is cash sale.
Valuing assets is a very tricky proposition and should only be done by an lawyer. Furthermore, if the asset is linked to a loan, the debtor must keep making payments on the note to retain the property.
Nonexempt Assets in Bankruptcy
Boats, vacation homes, and other nonexempt assets are not automatically auctioned off, because such sales are not always in the best interests of the creditors. Often, the property needs work to make it attractive to buyers, buyers almost never pay the asking price, and there are always fixed costs, like storage fees, brokerage fees, and so on. If creditors would receive little or no money after an auction sale, the move is not in their best interests.
If property does go to auction sale, the debtor almost always has the opportunity to remove personal and other items before the sale. It is not legal for debtors to bid on their own property at auction, but it is legal for them to buy it back from third parties, as long as the transactions are at arm’s length and for fair market value.
Contact Experienced Lawyers
Most property is exempt in consumer bankruptcies. For prompt assistance in this area, contact an experienced bankruptcy lawyer in Chicago from the Bentz Holguin Law Firm, LLC. We have offices in Indiana and Illinois.
Resource:
washingtonpost.com/blogs/where-we-live/post/selling-a-home-to-a-real-estate-investor/2012/12/11/5907944e-40bb-11e2-a2d9-822f58ac9fd5_blog.html
