American home mortgage liquidating trust
Certain unique aspects of the ruling may limit its applicability.
This position was accepted by the Court, resulting in a finding that the nondefaulting party suffered no damages from the termination.
As a result, Calyon's arguments about why it could not obtain a market value for the loan portfolio on the Acceleration Date – disputes over ownership and loan servicing rights, in addition to frozen markets and uncertain delinquency rates – were irrelevant.Calyon argued that the phrase meant "what one could buy or sell the assets for in the market place" and that the only relevant "determinants" are "those that provide evidence of the asset's market price, such as the price actually received in a sale, the price available from a generally recognized source, the most recent bid quotation from that source, or expert testimony regarding the market price." The Debtors countered that Calyon's definition was too narrow in light of the broad language used by Congress.Moreover, by using the plural word "determinants", Congress clearly intended that "more than one valuation methodology may constitute a 'commercially reasonable determinant' of an asset's value." Further, Congress' use of the word "value" rather than "market value" suggests that Congress intended for the "use of multiple methodologies to determine value, including those that do not rely on the existence of a functional market." The bankruptcy court, after considering the sparse legislative history behind section 562 of the Bankruptcy Code and its apparent purpose, adopted the Debtor's view.Based on the section 559 safe harbor, the acceleration and termination of the repurchase agreement did not violate the automatic stay of section 362.Further, the subsequent sale by Calyon of the mortgage loan portfolio would not violate the automatic stay.