In Re Peter Gordon Balbus, Debtor. Brown and Company Securities Corporation v. Peter Gordon Balbus

Brown & Co. has asserted that, for purposes of 11 U.S.C. § 506(a), the fair market value of the debtor’s real property should be reduced, in all cases, by an amount equal to the hypothetical costs of sale of the property. The majority’s quarrel with the proposition so stated is that the reduction should take place only if the debtor intends to dispose of the property. That quarrel pits authorities favoring a general rule of the deduction in all cases against what my brothers characterize as a “growing number” of jurisdictions endorsing the disposition distinction and disallowing the deduction…