Lancaster Residential Investors v. North American Life Assurance Co. (In re Lancaster Residential Investors)

OPINION

WILLIAM A. KING, Jr., Bankruptcy Judge.

In this adversary proceeding, the debtor-in-possession, Lancaster Residential Investors (Lancaster), seeks to use insurance proceeds from a fire loss to repair its damaged property.

Briefly summarized, the facts are as follows:

Lancaster and Hempfield Investors jointly own an apartment complex located in Lancaster County, Pennsylvania, comprising 364 units and known as Covered Bridge Apartments. On October 17, 1978, Hemp-•field and Lancaster each filed petitions for arrangements under Chapter XII. Upon application of the Debtors, the proceedings…