RULING ON MOTION FOR RELIEF FROM AUTOMATIC STAY
ROBERT L. KRECHEVSKY, Bankruptcy Judge.
I.
The matter before the court is a contested motion for relief from the automatic stay imposed by Bankruptcy Code § 362(a)
, filed by Merchants Bank (“the
movant”) in the Chapter 11 case of Maxwell Frazer (“the debtor”) concerning realty known as “Max’s Country Village Inn” and “Mr. G’s Restaurant” located on Route 131, in Ascutney Village, Town of Weath-ersfield, Vermont (“the property”). Specifically, the movant seeks a decision from the present court concerning the continued running of a mortgage redemption period, established pre-petition by a state court in a strict foreclosure proceeding
, when the mortgagor files a bankruptcy petition. The movant forthrightly states that the ruling it requests would be contrary to prior rulings, in like circumstances, made by two previous Vermont Bankruptcy Judges.
The two prior rulings, identified in the movant’s Memorandum Of Law In Support Of Motion, are
In re Shea Realty, Inc.,
21 B.R. 790, 792 (Bankr.D.Vt.1982) (Marro, B.J.) (“[Ujntil the redemption period actually expires Debtor holds a property right.... [s]ubsection (a)(2)(3) and (4) of Section 362 would be violated by the continued running of the redemption period in a mortgage foreclosure action.”); and
In re L.H. & A. Realty Co., Inc.,
57 B.R. 265, 268 (Bankr.Vt.1986) (Conrad, B.J.). (same, plus Section 108 is an “administrative not a substantive provision,” such as § 362(a) which tolls the period of redemption.). Judges Marro and Conrad thus each held that the filing of a bankruptcy petition stayed, pursuant to the provisions of § 362(a), the running of an unexpired redemption period established in. a state-court strict mortgage foreclosure action. These holdings considered and denied the relevance of Bankruptcy Code § 108(b)
in such circumstances.
The movant argues that the decisional law the
Shea
and
L.H. & A.
courts relied upon in their rulings “can no longer be considered good law ... [or] sound precedent.” (Movant’s Mem. at 4-5.) The mov-ant further asserts: “Indeed, the case law in other jurisdictions now appears to be unanimous in holding that state law equity of redemption periods are not stayed by section 362.”
(Id.
at 5.) The movant requests, based upon the uncontested facts established in its motion, that the court direct the debtor to relinquish the property to the movant. (Motion at 6.)
The debtor filed an objection to the granting of the movant’s motion. The debtor, in effect, argues the rulings of Judges Marro and Conrad that have guided Vermont bankruptcy practice for the past 17 years should remain undisturbed. (Objection at ¶¶ 9, 10 (citing
Shea,) L.H. & A.
and
In re Driscoll,
223 B.R. 665 (Bankr. D.Vt.1998)(“[T]he running of the redemption period is tolled through the pendency of the case, or, until the stay is lifted.”)).
II.
The movant’s motion, filed on June 24, 1999, alleges as facts (net contested by the debtor in his responsive papers) that the movant, the holder of a mortgage on the debtor’s property, commenced a strict foreclosure action on January 18, 1998 in the Vermont Superior Court; that the superior court, pursuant to a stipulation signed by the debtor on September 11, 1998, entered a “Consolidated Judgment Order and Decree of Foreclosure” which established September 15, 1998 as the redemption date for the debtor — i.e., the date by which the debtor shall pay the mortgage debt, or, if not, “then the equity of redemption of the said [debtor] ..., shall be foreclosed and forever barred from any and all equity of redemption in and to [the property]. ... and [the mov-ant] ... shall be entitled to title, possession and ownership of [the property]”; that the debtor on or about September 14, 1998 filed a petition under Chapter 18 of the Bankruptcy Code; that on or about December 15, 1998 the bankruptcy court dismissed the Chapter 13 petition and on December 16, 1998 the debtor filed a petition under Chapter 11
; and that the mov-ant never received payment of its mortgage debt as established by the superior court.
The motion asserts that by reason of the foregoing facts and the operation of § 108(b), the debtor’s bankruptcy petition filed on September 15, 1998 “may have extended the equity of redemption period by 60 days... to not later than November 13, 1998” and since the debtor did not then, or after, so redeem, the debtor’s “equity in such Property is foreclosed.” (Motion at 5.) Accordingly, the motion requests that the court order the debtor to relinquish the property to the movant.
III.
The Second Circuit Court of Appeals has not ruled on whether, under the circumstances described in Section II, § 362(a) stays the running of the redemption period or whether the redemption period running is subject only to the 60-day grace period of § 108(b).
The movant’s argument fails to note the distinction between a mortgagor’s equity of redemption, which is a property interest that exists prior to the passing of title, and a right, available only in those states where statutes so provide, to repurchase the already foreclosed property from a buyer following a foreclosure sale. While the movant’s Memorandum cites several courts of appeal decisions in support of its contention that § 108(b) should be the applicable Bankruptcy Code provision, all but one of these decisions concerned a debtor’s statutory right of redemption following a foreclosure by sale.
See Johnson v. First Nat’l Bank of Montevideo,
719 F.2d 270 (8th Cir.1983),
cert. denied,
465 U.S. 1012, 104 S.Ct. 1015, 79 L.Ed.2d 245 (1984);
Federal Land Bank of Louisville v. Glenn (In re Glenn),
760 F.2d 1428 (6th Cir.1985),
cert. denied,
474 U.S. 849, 106 S.Ct. 144, 88 L.Ed.2d 119 (1985);
Martinson v. First Nat’l Bank of Oakes (In re Martinson),
731 F.2d 543 (8th Cir.1984);
Goldberg v. Tynan (In re Tynan),
773 F.2d 177 (7th Cir.1985).
Unlike the circumstances in the decisions the movant cites, the instant proceeding does not concern a “statutory grace period,” but a potential transfer
of
a property right.
Compare Counties Contracting & Construction Co. v. Constitution Life Ins. Co.,
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RULING ON MOTION FOR RELIEF FROM AUTOMATIC STAY
ROBERT L. KRECHEVSKY, Bankruptcy Judge.
I.
The matter before the court is a contested motion for relief from the automatic stay imposed by Bankruptcy Code § 362(a)
, filed by Merchants Bank (“the
movant”) in the Chapter 11 case of Maxwell Frazer (“the debtor”) concerning realty known as “Max’s Country Village Inn” and “Mr. G’s Restaurant” located on Route 131, in Ascutney Village, Town of Weath-ersfield, Vermont (“the property”). Specifically, the movant seeks a decision from the present court concerning the continued running of a mortgage redemption period, established pre-petition by a state court in a strict foreclosure proceeding
, when the mortgagor files a bankruptcy petition. The movant forthrightly states that the ruling it requests would be contrary to prior rulings, in like circumstances, made by two previous Vermont Bankruptcy Judges.
The two prior rulings, identified in the movant’s Memorandum Of Law In Support Of Motion, are
In re Shea Realty, Inc.,
21 B.R. 790, 792 (Bankr.D.Vt.1982) (Marro, B.J.) (“[Ujntil the redemption period actually expires Debtor holds a property right.... [s]ubsection (a)(2)(3) and (4) of Section 362 would be violated by the continued running of the redemption period in a mortgage foreclosure action.”); and
In re L.H. & A. Realty Co., Inc.,
57 B.R. 265, 268 (Bankr.Vt.1986) (Conrad, B.J.). (same, plus Section 108 is an “administrative not a substantive provision,” such as § 362(a) which tolls the period of redemption.). Judges Marro and Conrad thus each held that the filing of a bankruptcy petition stayed, pursuant to the provisions of § 362(a), the running of an unexpired redemption period established in. a state-court strict mortgage foreclosure action. These holdings considered and denied the relevance of Bankruptcy Code § 108(b)
in such circumstances.
The movant argues that the decisional law the
Shea
and
L.H. & A.
courts relied upon in their rulings “can no longer be considered good law ... [or] sound precedent.” (Movant’s Mem. at 4-5.) The mov-ant further asserts: “Indeed, the case law in other jurisdictions now appears to be unanimous in holding that state law equity of redemption periods are not stayed by section 362.”
(Id.
at 5.) The movant requests, based upon the uncontested facts established in its motion, that the court direct the debtor to relinquish the property to the movant. (Motion at 6.)
The debtor filed an objection to the granting of the movant’s motion. The debtor, in effect, argues the rulings of Judges Marro and Conrad that have guided Vermont bankruptcy practice for the past 17 years should remain undisturbed. (Objection at ¶¶ 9, 10 (citing
Shea,) L.H. & A.
and
In re Driscoll,
223 B.R. 665 (Bankr. D.Vt.1998)(“[T]he running of the redemption period is tolled through the pendency of the case, or, until the stay is lifted.”)).
II.
The movant’s motion, filed on June 24, 1999, alleges as facts (net contested by the debtor in his responsive papers) that the movant, the holder of a mortgage on the debtor’s property, commenced a strict foreclosure action on January 18, 1998 in the Vermont Superior Court; that the superior court, pursuant to a stipulation signed by the debtor on September 11, 1998, entered a “Consolidated Judgment Order and Decree of Foreclosure” which established September 15, 1998 as the redemption date for the debtor — i.e., the date by which the debtor shall pay the mortgage debt, or, if not, “then the equity of redemption of the said [debtor] ..., shall be foreclosed and forever barred from any and all equity of redemption in and to [the property]. ... and [the mov-ant] ... shall be entitled to title, possession and ownership of [the property]”; that the debtor on or about September 14, 1998 filed a petition under Chapter 18 of the Bankruptcy Code; that on or about December 15, 1998 the bankruptcy court dismissed the Chapter 13 petition and on December 16, 1998 the debtor filed a petition under Chapter 11
; and that the mov-ant never received payment of its mortgage debt as established by the superior court.
The motion asserts that by reason of the foregoing facts and the operation of § 108(b), the debtor’s bankruptcy petition filed on September 15, 1998 “may have extended the equity of redemption period by 60 days... to not later than November 13, 1998” and since the debtor did not then, or after, so redeem, the debtor’s “equity in such Property is foreclosed.” (Motion at 5.) Accordingly, the motion requests that the court order the debtor to relinquish the property to the movant.
III.
The Second Circuit Court of Appeals has not ruled on whether, under the circumstances described in Section II, § 362(a) stays the running of the redemption period or whether the redemption period running is subject only to the 60-day grace period of § 108(b).
The movant’s argument fails to note the distinction between a mortgagor’s equity of redemption, which is a property interest that exists prior to the passing of title, and a right, available only in those states where statutes so provide, to repurchase the already foreclosed property from a buyer following a foreclosure sale. While the movant’s Memorandum cites several courts of appeal decisions in support of its contention that § 108(b) should be the applicable Bankruptcy Code provision, all but one of these decisions concerned a debtor’s statutory right of redemption following a foreclosure by sale.
See Johnson v. First Nat’l Bank of Montevideo,
719 F.2d 270 (8th Cir.1983),
cert. denied,
465 U.S. 1012, 104 S.Ct. 1015, 79 L.Ed.2d 245 (1984);
Federal Land Bank of Louisville v. Glenn (In re Glenn),
760 F.2d 1428 (6th Cir.1985),
cert. denied,
474 U.S. 849, 106 S.Ct. 144, 88 L.Ed.2d 119 (1985);
Martinson v. First Nat’l Bank of Oakes (In re Martinson),
731 F.2d 543 (8th Cir.1984);
Goldberg v. Tynan (In re Tynan),
773 F.2d 177 (7th Cir.1985).
Unlike the circumstances in the decisions the movant cites, the instant proceeding does not concern a “statutory grace period,” but a potential transfer
of
a property right.
Compare Counties Contracting & Construction Co. v. Constitution Life Ins. Co.,
855 F.2d 1054, 1058 (cited by movant as applying § 108(b) “to a statutory grace period” for the payment of life insurance premiums),
with In re Shea Realty, Inc.,
21 B.R. 790, 792 (Bankr.D.Vt. 1982) (equity of redemption is a “property right.”). Further, contrary to the mov-ant’s unsupported assertion of the uniqueness of the two Vermont holdings, other bankruptcy courts in addition to Vermont have reached a like conclusion with regard to strict foreclosure of a debtor’s equity of redemption.
See In re St. Amant,
41 B.R. 156, 163 (Bankr.D.Conn.1984). (“[T]he involuntary transfer of ownership worked [postpetition] by the terms of the strict foreclosure judgment is the very thing which § 362(a) was designed to prevent.”).
Cf. also In re Carr,
52 B.R. 250, 262 (Bankr.E.D.Mich.1985) (“[T]he treatment of a redemption period in bankruptcy is dependent on the means by which that redemption period is established. Where it begins to run by operation of law
after
the change of equitable title, as in a foreclosure sale, the debtor retains no substantive ownership interest which passes to the bankruptcy estate. However, where the redemption period is established by judgment, and where, by the terms of that judgment, equitable title does not pass until after the redemption period has expired, the debtor retains an actual ownership interest.... The judgment ... is not final until the redemption period expires; thus, any further proceedings to obtain possession ... [or] an automatic transfer [would violate § 362(a)(1) ] ... § 362(a)(2) ... § 362(a)(3).”) (emphasis in original; citations omitted).
The court finds the reasoning of the decisions cited by the movant inapplicable to the instant proceeding. Although the holdings of some of the decisions cited in
Shea
were later superseded in their jurisdictions, those also concerned post-foreclosure-sale statutory rights of redemption, rather than post-petition expiration of redemption periods in strict or absolute foreclosure proceedings.
See, e.g., Moratzka v. Lanesboro State Bank (In re
Johnson), 8 B.R. 371 (Bankr.D.Minn.1981).
The movant has presented no persuasive argument or authority to convince the present court to jettison the holdings that the automatic stay provisions of § 362(a) stay the foreclosure of the debtor’s equity of redemption under Vermont law. The results reached in
Shea
and
L.H. & A.
are consistent not only with Vermont foreclosure law, but also with the policy considerations and legislative history of §§ 108(b) and 362(a) of the Bankruptcy Code.
See In re St. Amant,
41 B.R. at 160-64.
rv.
For the foregoing reasons, the court concludes that the debtor’s equity of redemption is property of the bankruptcy estate and is subject to the automatic stay provisions of § 362(a). Inasmuch as no other argument has been offered by the movant for the granting of its motion, the motion for relief from the automatic stay must be, and hereby is, denied. The debt- or’s request for an award of costs to defend the motion is completely unsupported, and is denied. It is
SO ORDERED.