Liebzeit v. Intercity State Bank (In re Blanchard), 520 B.R. 740 (Bankr. E.D. Wis. 2014) –

A Chapter 7 trustee sought to avoid a mortgage on the debtors’ property using the “strong arm” powers of a hypothetical bona fide purchaser of real estate.  The complication was that the debtors sold the real estate on land contract before they granted the mortgage.

Weiss v. JPMorgan Chase Bank, N.A. (In re Thibault), 518 B.R. 635 (Bankr. D. Mass. 2014) –

A chapter 7 trustee sought to avoid a mortgage using his “strong­arm” powers on the basis that it was not properly recorded because the spelling of the debtor’s last name in the mortgage was not the “correct” spelling.

Rogan v. U.S. Bank, N.A. (In re Partin), 517 B.R. 770 (Bankr. E.D. Ky. 2014) –

A chapter 7 trustee sought to avoid mortgages on three properties using his “strong arm” powers, arguing that they were improperly recorded and thus did not provide constructive notice to a purchaser or lien creditor.

Agin v. Dookhan (In re Hultin), 516 B.R. 190 (Bankr. D. Mass. 2014) –

A chapter 7 trustee sought to avoid a transfer of the debtor’s real property using his “strong arm” powers based on an argument that the deed conveying the property did not provide constructive notice since it was not properly indexed in the real estate records.

Kellner v First Ohio Banc & Lending, Inc. (In re Geraci), 507 B.R. 224 (Bankr. S.D. Ohio 2014) –

Albert v. Green Tree Servicing, LLC (In re El Erian), 512 B.R. 391 (Bankr. D. D.C. 2014) –

A chapter 7 trustee sought to avoid the lien of a recorded deed of trust because (1) it contained both correct and incorrect parcel numbers and (2) it was improperly indexed. The issue turned on whether a bona fide purchaser would have had inquiry or constructive notice of the deed of trust.

Hardesty v. Mortgage Electronic Registration Systems, Inc. (In re Boothe), 510 B.R. 154 (Bankr. S.D. Ohio 2013) –

A chapter 7 trustee successfully sought to avoid a mortgage using his “strong arm” powers on the basis that the mortgage was not properly acknowledged. Once again a mortgagee paid dearly for sloppy execution of a document.

Field v. Wells Fargo Home Mortgage (In re Jared), 474 B.R. 521 (Bankr. S.D. Ohio 2011) –

Olsen v. Heaver (In re Heaver), 473 B.R. 734 (Bankr. N.D. Ill. 2012) –

The short story is that when a deed and mortgage are executed at the same time, but the mortgage is recorded before the deed, the recorded mortgage does not provide constructive notice and can be avoided in a bankruptcy – at least under Illinois law as interpreted by the Heaver bankruptcy court.

In the matter of Cognotec Ltd (in receivership)

Section 60(14) provides that a transaction in breach of section 60 is voidable against any person who had notice of the facts which constitute the breach.

The company sought to void the debenture which secured the loan on the basis that section 60 had not been complied with and the receiver appointed on foot of the debenture brought a motion for directions.

The court held that: