Michael B. Kaplan
Hon.
United States Bankruptcy Judge
James G. Aaron, Esq.
ANSELL GRIMM & AARON
Stephen B. McNally, Esq.
McNALLY & ASSOCIATES, L.L.C.
Barry Frost
TEICH GROH
Motion for Relief from the Automatic Stay
Dear Counsel:
In reviewing this matter, a new wrinkle confronts the Court. It appears that the underlying lease in this case was rejected under the Debtor's Chapter 13 Plan, subsequently confirmed by this Court. As a result, all alleged obligations owing under the lease constitute pre-petition claims to be addressed under the Debtor's plan. As there is no longer a lease in place, the Debtor's post-petition obligations must be bottomed on a judicially determined use and occupancy basis. Whether the Schultz estate or Mr. Schultz is entitled to collect such post-petition use and occupancy charges is inextricably intertwined with the issues raised by the Debtor as to the alleged fraudulent transfer of the property to Mr. Schultz. Moreover, this Court is not prepared at this juncture to rule that the doctrines of set-off or recoupment would not serve as a bar to collection of outstanding post-petition use and occupancy charges. In saying this, the Court denies as premature Mr. Schultz's Motion for Relief from the Automatic Stay.
The Court is cognizant, however, that the Debtor has lived in the subject apartment without paying rent or making a mortgage payment since the filing of her bankruptcy. The Court finds it appropriate to direct the Debtor to make monthly use and occupancy payments, in escrow, if she intends to remain in the property. Accordingly, after comparing rents in Hoboken of similar sized apartments located near 223 Bloomfield St., the Court has determined that an appropriate monthly rate for Debtor's use and occupancy of the property is $2,136/month (See attached supporting documentation). Therefore, the Court orders that the maintenance of the Automatic Stay is conditioned upon the Debtor's payment of $2,136/month for the use and occupancy of the apartment, commencing July 15, 2012, until the Adversary Cases under docket numbers 12-01002 and 08-0220 are resolved. The Court further directs Mr. Schultz's Chapter 7 Trustee to hold these payments in escrow until the conclusion of the aforementioned adversary proceedings, or the Trustee may authorize Debtor's counsel to hold said payments in his attorney trust account until such resolution. Debtor is directed to submit a form of order reflecting the Court's rulings.
Yours very truly,
______________
Honorable Michael B. Kaplan
United States Bankruptcy Judge