First Federal Savings of Arkansas, F.A. v. City National Bank of Fort Smith

MEMORANDUM OPINION

MORRIS SHEPPARD ARNOLD, District Judge.

This bankruptcy appeal presents, at bottom, a single legal issue for determination, namely, whether debtors’ lender acquired an interest in debtors’ rents by virtue of instruments executed in connection with a loan of $10,000,000.00. The bankruptcy court held that the lender did not acquire such an interest. For the reasons adumbrated below, this court is of the view that the lender acquired at the very least a mortgagee’s interest in debtors’ rents, and probably acquired the rents themselves, before the debtors filed their Chapter 11…