Tyler Applied Retroactively to Set Aside a Judgment of Tax Foreclosure

July 31, 2024

Tyler Applied Retroactively to Set Aside a Judgment of Tax Foreclosure

Tyler was applied retroactively because the debtor’s efforts to set aside a tax foreclosure judgment were ‘in the pipeline’ when bankruptcy began.

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Opinion Link

View Opinion

https://abi-opinions.s3.amazonaws.com/Virella.pdf

Case Details

Case Citation

Virella v. TLOA of NJ LLC (In re Virella), 24-1084 (Bankr. D.N.J. June 18, 2024)

Case Name

Virella v. TLOA of NJ LLC (In re Virella)

Case Type

Business

Court

3rd Circuit

New Jersey

Bankruptcy Tags

Automatic Stay

Fraudulent Transfers

Valuation

Consumer Bankruptcy

Mortgage

Business Reorganization

Govt. Claims/Sovereign Immunity

Comments

Submitted by Thomas Salerno on July 31, 2024

Bill This is an interesting decision but left me scratching my head a bit. In the BFP v. Resolution Trust Supreme Court case of many years ago, the Supreme Court held in a fraudulent conveyance context that reasonably equivalent value was conclusively presumed in a validly conducted foreclosure sale held in accordance with applicable law. Here (if I'm understanding the decision) the Supreme Court is stating that even if there is a validly conducted tax foreclosure which presumably cannot under BFP be a fraudulent transfer, the tax sale can still be avoidable in a bankruptcy because it violates the Taking Clause. Seems inconsistent to me. What am I missing? Are we doomed to go back to the 75% rule in Durrett again? How does a buyer in a tax foreclosure sale get title insurance (again, harkening back to the Durrett days)?