Dollar Bank, FSB v. Maronda Homes, Inc. (In re Spring Grove Development, Inc.)

MEMORANDUM OPINION2

JUDITH K. FITZGERALD, Chief Judge.

In the matter before us Debtor’s former counsel misappropriated $620,000 in proceeds from the sale of Debtor’s real estate. The question we must answer is whether the purchaser who paid the purchase price or the mortgagee bears the loss. Specifically, the mortgagee, Dollar Bank, argues that, although the order confirming the sale in this case provided that the liens on the property were transferred to the proceeds, the hens remained on the property until the proceeds were turned over to Dollar Bank. Because the proceeds were not paid to…