Church v. Colling (In re Aldersgate Foundation, Inc.)

EDMONDSON, Circuit Judge:

In this bankruptcy ease, we reverse the district court’s order and remand with instructions.

BACKGROUND

Before filing a petition for bankruptcy, the debtor, Aldersgate Foundation, Inc., issued first mortgage bonds pursuant to four separate Indentures of Trust. Each Indenture of Trust pledged as security one of four tracts of land: property in Kissimmee, Key West, Orange City and Englewood, Florida. The bondholders were secured by the property and any “proceeds realized from any sale or sales of the property.”

After Aldersgate filed a petition in bankruptcy, the Trustee,…