Berge v. Value Enterprises, Ltd. (In re Berge)

MEMORANDUM DECISION

ROBERT D. MARTIN, Bankruptcy Judge.

Plaintiffs-debtors, Philip and Betty Jo Berge (“the Berges”) own a farm known as the Newell farm as tenants in common with Gordon and Ruth Stenoien (“the Sten-oiens”). The Stenoiens hold an 85% interest in Value Enterprises, Ltd. (“VEL”), the defendant. On March 19, 1981, the Berges and VEL entered into a loan agreement drawn up by VEL pursuant to which VEL loaned the Berges $250,000 at 20% interest due on July 1, 1981. The due date was later extended to December 31, 1981. As security for the loan, the Berges granted VEL an option to buy…