United American Financial Corp. v. First Heritage National Bank of Loudon County (In Re United American Financial Corp.)

MEMORANDUM

CLIVE W. BARE, Bankruptcy Judge.

At issue is whether the proceeds from property sold under a deed of trust power of sale were properly applied to extinguish a first lien for property taxes. Tenn.Code Ann. § 67-5-2101 (1983). Plaintiff contends that, as a matter of Tennessee law, a purchaser at a foreclosure sale takes subject to tax liens unless expressly and specifically stated otherwise in either the foreclosure notice or at the foreclosure sale. Disagreeing, defendants assert proceeds from the foreclosure sale were properly applied to discharge taxes against the property sold.

I

The…