The First National Bank of North East v. Edwin B. Fockler, Iii, Trustee, in Re Crystal Beach Manor, Inc., Bankrupt

K. K. HALL, Circuit Judge:

First National Bank of North East (Bank) appeals from a judgment of the district court affirming the bankruptcy court’s denial of its claims to certain mortgages assigned by Crystal Beach Manor, Inc. (C/B), a bankrupt corporation. We find the determination of the bankruptcy court clearly erroneous and remand for further proceedings.

Gerald Exten was president and sole stockholder of Exten Associates, Inc. (Ex-ten, Inc.), a land development company. C/B was a wholly owned subsidiary of Ex-ten, Inc. with Gerald Exten as president. These companies purchased large tracts…