Collective Concepts LLC v. PennyMac Loan Services, LLC

Summary

The United States Bankruptcy Court for the Northern District of Georgia denied Collective Concepts LLC’s motion under Federal Rule of Civil Procedure 60(b)(4) to vacate as void an order granting PennyMac Loan Services, LLC in rem relief under 11 U.S.C. § 362(d)(4). The court held that PennyMac was a party in interest, that the automatic stay and § 362(d)(4) could apply despite PennyMac not being a creditor of Collective and the property not being estate property, and that multiple bankruptcy filings constituted a scheme to hinder or delay foreclosure. The court also rejected arguments concerning jurisdiction after dismissal, evidentiary support, and due process.

Holdings

1. PennyMac was a party in interest entitled to seek relief under § 362(d)(4), and the Court had authority to grant in rem relief even though PennyMac was not Collective's creditor and the property was not owned by or included in Collective's bankruptcy estate.
2. The filings constituted a scheme to delay or hinder PennyMac's foreclosure rights involving multiple bankruptcy filings affecting the property, and the conduct of Solomon and the affiliated entity could be considered in determining whether Collective's petition was part of that scheme.
3. The Court retained authority to decide the pending § 362(d)(4) motion and to enter the in rem order before entering the dismissal order.
4. The in rem order did not violate due process because Collective received notice of PennyMac's motion and an opportunity to be heard at a hearing, where Solomon appeared and testified.
5. A limited liability company may not represent itself in federal court and may proceed only through an attorney; therefore, Collective lacked authority to file pro se motions.

Questions Presented

1. Whether a secured lender that is not a creditor of the debtor and whose collateral is not property of the debtor's estate may obtain in rem relief under 11 U.S.C. § 362(d)(4).
2. Whether multiple bankruptcy filings by an individual debtor and an affiliated limited liability company may constitute a scheme to delay, hinder, or defraud creditors under § 362(d)(4).
3. Whether the Bankruptcy Court lost authority to rule on PennyMac's motion for in rem relief after orally ruling that Collective's case should be dismissed.
4. Whether granting in rem relief based in part on testimony from Collective's owner violated due process or required formal admission of undisputed documentary materials.
5. Whether Collective, a limited liability company, could file motions and otherwise represent itself without counsel in federal court.

Disposition

other