James Anthony Nelson and Jayme Beth Nelson

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF NEW MEXICO
In re:
JAMES ANTHONY NELSON and
JAYNE BETH NELSON,
Debtors. 	No. 11-09-10363 MA
FINDINGS OF FACT AND CONCLUSIONS
OF LAW ON WESTGRO’S STAY MOTION
This matter came before the Court for trial on the merits of
Westgro, LLC’s Motion for Relief from Automatic Stay (“Motion”)
(doc 42), and the Debtors’ Objection thereto (doc 55). 	Westgro,
LLC seeks relief from the automatic stay to continue its state
court foreclosure lawsuit in state District Court on Debtors’
rental property located at 3848 Inca NE, Albuquerque, NM. 	This
is a core proceeding. 	28 U.S.C. § 157(b)(2)(A). 	For the reasons
set forth below, the Court finds the Motion is well taken and
should be granted.
FACTS
The parties stipulated to admission of Westgro’s Exhibits W-
1 through W-6 and Debtors’ Exhibit A. 	They also stipulated to
the following facts:
1. 	Debtors purchased the property in April, 2008.
2. 	Debtors have the property leased to a tenant.
3. 	Westgro, LLC has a properly perfected security interest in
the property and the rents therefrom.
4. 	Debtors have not segregated the rents or paid over the cash
collateral through the date of the stay hearing.
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5. 	The payoff of the mortgage was $218,481.70 as of the date of
the hearing.
6. 	The appraiser hired by Westgro, LLC will claim the property
is undersecured.
The Court finds the following facts:
7. 	Heidi Chavez was qualified by the Court as an expert
appraisal witness. 	Her appraisal appears as Exhibit W-6.
She placed a value on the property of $ 201,000.00. 	She
also testified that properties in the general area of the
subject property dropped between 17.5 and 24.3% over the
last 18 months.
8. 	The Court finds that the Chavez appraisal fairly states the
value of the property as of the appraisal date. 	The Court
finds that Ms. Chavez complied with all standards for
appraising the property, went to the property, took photos,
measured, inspected, and then looked for comparable
properties. 	The properties she picked as comparables appear
reasonable, and it appears she made reasonable adjustments
to arrive at a fair market value of the property.
9. 	Debtors valued the property on their Schedule A at
$250,000.00. 	Mr. Nelson, who is a general contractor and
real estate professional, testified that he purchased the
property in April, 2008 for $250,000.00. 	He believes that
$250,000.00 is an accurate current value for the property.
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10. 	The Court found Ms. Chavez more persuasive regarding the
value of the property.
11. 	Westgro, LLC is undersecured.
12. 	Debtors filed their voluntary petition under Chapter 11 on
February 2, 2009.
13. 	Debtors’ Chapter 11 Plan was due by June 2, 2009. 	The 11
U.S.C. § 1121(b) exclusivity period for filing a plan ran
out on June 2, 2009. 	As of August 11, 2009 Debtors have not
filed a Plan or Disclosure Statement.
14. 	Debtors offered no concrete plan at the stay hearing, other
than generalities about writing down their real estate
investments and holding them as inventory. 	The Court finds
that there is no reasonable possibility of a successful
reorganization within a reasonable time.
15. 	Debtors currently have the property rented for $1,300.00.
The monthly payment called for by the note is $1,912.50.
CONCLUSIONS OF LAW
1. 	Under 11 U.S.C. § 362(d)(2)(A) (to be applied in conjunction
with 11 U.S.C. § 362(d)(2)(B)) a debtor must have equity in
the property to avoid lifting of the automatic stay. 	In
this case, Debtors lack any equity.
2. 	Under 11 U.S.C. § 362(d)(2)(B) a debtor must prove that the
property is necessary to an effective reorganization to
avoid lifting of the automatic stay. 	To prove this, a
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debtor must show that “the property is essential for an
effective reorganization that is in prospect” and that there
is a “reasonable possibility of a successful reorganization
within a reasonable time.” 	United Savings Assoc. of Texas
v. Timbers of Inwood Forest Assoc., Ltd. (In re Timbers of
Inwood Forest Assoc., Ltd.), 484 U.S. 365, 375-76 (1988).
In this case, Debtors did not so prove.
3. 	The automatic stay should be terminated as to 3848 Inca NE,
Albuquerque, NM. 	A separate Order will enter.
Honorable James S. Starzynski
United States Bankruptcy Judge
Date Entered on Docket: 	August 13, 2009
Copies to:
George M Moore
Moore, Berkson & Gandarilla, P.C.
Attorney for Debtors
PO Box 7459
Albuquerque, NM 87194
Michael K Daniels
Attorney for Westgro, LLC
PO Box 1640
Albuquerque, NM 87103-1640
United States Trustee
PO Box 608
Albuquerque, NM 87103-0608
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