06888.0323/16744532.1 

Donald H. Cram 

Tex. State Bar No. 05000300 

dhc@severson.com 

SEVERSON & WERSON 

A Professional Corporation 

One Embarcadero Center, Suite 2600 

San Francisco, California 94111 

Telephone: (415) 398-3344 

Facsimile: (415) 956-0439 

Attorneys for Secured Creditor 

NISSAN MOTOR ACCEPTANCE 

COMPANY LLC 

UNITED STATES BANKRUPTCY COURT 

NORTHERN DISTRICT OF TEXAS 

DALLAS DIVISION 

In re Stephanie Morris Nissan LLC 

Debtor. 

_____________________________________

Nissan Motor Acceptance Company LLC,

 Movant, 

v. 

Stephanie Morris Nissan LLC, and Daniel J. 

Sherman, Trustee, 

 Respondents. 

 Case No. 24-30310-mvl 

Chapter 7 

 

MOTION FOR RELIEF FROM 

THE AUTOMATIC STAY 

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 NMAC, secured creditor in this Chapter 7 Case, submits this Motion respectfully 

requesting that the Court grant relief from the automatic stay allowing NMAC to complete its 

disposition of certain vehicle collateral, which was repossessed prepetition, and in support would 

show the Court as follows: 

BACKGROUND 

1. NMAC provides floor plan financing, which is also kn

inventory lending. By floor plan financing, automotive dealers receive loans from NMAC to pay 

it must repay the loan owed to NMAC for that vehicle within deadlines contractually agreed to 

by the dealer. NMAC has a security interest in the vehicle to secure the loan payment. If the 

dealer fails to repay the flooring loan after the vehicle is sold, in effect converting the borrowed 

loan funds to its own use, the dealer breaches its financing agreement with NMAC and is said to 

source for repayment of the flooring loans, it demands immediate payment of SOT obligations. 

2. The process by which a dealer obtains financing for used vehicles differs from the 

process by which it obtains new vehicles, but the lending is similar. On its own initiative, 

dealers search for, select, and purchase used vehicles from auctions and other sources. To 

purchase these vehicles, dealers have to request funding from NMAC to add those used vehicle 

purchases to their floor plan. But in the same fashion as new vehicles, when a used vehicle is 

sold the dealer contractually agrees to timely pay NMAC the flooring loan for that used vehicle. 

3. Under floor financing, NMAC requires a dealer to pay the unpaid balance of any 

flooring loan with respect to a vehicle at or near the date on which the vehicle was sold, leased, 

or placed into use by the dealer. Failure to comply with this payment obligation constitutes a 

breach of the financing agreements. If a vehicle is sold, leased, or otherwise unaccounted for, 

and the out-standing balance is not paid off as required, the vehicle is deemed SOT. In addition 

to payment of flooring loans as vehicles are sold, the dealer must pay interest on the total 

principal balance of all the flooring loans. Interest is due on a monthly basis. 

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4. inventory or vehicle 

-borrowers are complying 

with their loan repayment requirements. These inventory audits can occur as little as twice a 

year, or as often as once a month or more. 

the dealership to count the vehicles and determine whether a dealer-borrower is repaying NMAC 

in compliance with its obligations. If NMAC discovers a sold vehicle for which loan repayment 

is due, or if NMAC identifies a vehicle which has been removed from the dealership premises, 

NMAC makes demand for payment of the flooring loan for that vehicle at the conclusion of the 

audit. If the loan repayment is not made, then the vehicle is deemed SOT. 

5. NMAC is h

collateral cannot be recovered. A SOT is a material breach of the financing agreement because 

 NMAC cannot recover a vehicle sold to a 

customer in the ordinary course of business under the Uniform Commercial Code. 

Wholesale Financing Agreement 

6. On or about January 13, 2022, Dealer

 entered into an Automotive Wholesale Financing and Security Agreement 

used automobiles, trucks and other vehicles. 

7.

NMAC a security interest in all of the following: 

2.4.1 Property, including all automobiles, trucks, truck-tractors, trailers, 

semi-trailers, buses, mobile homes, motor homes, other vehicles and 

other merchandise, and all parts, accessories, attachments, components 

and furnishings whether or not affixed thereto or used in connection 

therewith, including all goods hereafter added to or acquired in 

replacement or substitution of the foregoing, whether or not inventory or 

other and whether or not new, used, repossessed, surrendered or other; 

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2.4.2 All other goods, including without limitation, all inventory, 

machinery, equipment, tools, appliances, and office furniture and 

fixtures, including all goods hereafter added to or acquired in 

replacement of the foregoing; 

2.4.3 All accounts, accounts receivable, chattel paper, security 

agreements, instruments, contract rights, leases of property, all rentals 

due or to become due under any lease of any property, all other rentals, 

policies and certificates of insurance, deposit accounts, investment 

ship relating to vehicles, bills of 

sale, receipts, journals, records, files, books and ledger sheets, records 

financial condition and all computer programs, disk or tape files, 

printouts, runs or other computer-prepared information and the 

equipment containing such information, documents and general 

intangibles, including all monies and credits now due or to become due 

to Dealer from, and all claims against, vendors or inventory or other 

lending institutions; 

2.4.4 All other assets of Dealer, with the exception of real property, 

but including fixtures; and 

2.4.5 All cash and non-cash proceeds of the foregoing. 

collateral 

8. NMAC perfected its security interests in the Collateral by filing UCC-1 financing 

statements and amendments with the Office of the Secretary of State of Texas. NMAC filed its 

original UCC-1 financing statement on January 11, 2022, as instrument number 220001508492. 

9. Under the terms of the Wholesale Agreement at paragraph 2.3.2, Dealer promised 

to hold in trust and pay, without demand, the unpaid balance of any advance made by NMAC 

with respect to a Vehicle at or near the date on which the Vehicle was sold, leased, or placed into 

use by Dealer. 

Defaults by Dealer 

10. On or about September 14, 2023, NMAC conducted a wholesale inventory audit 

of Dealer. Based upon that audit NMAC determined that Dealer had sold Vehicles in breach of 

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proceeds of the sale or lease of these Vehicles. 

11. By letter dated September 18, 2023, NMAC provided notice to Dealer that it was 

in default under the Wholesale Agreement. NMAC demanded the Dealer cure the SOT defaults 

by close of business September 19, 2023. Dealer failed to comply with the demands NMAC 

made upon it in the September 18, 2023 letter. 

12. By letter dated September 21, 2023, NMAC provided notice to Dealer that it 

remained in default under the Wholesale Agreement and demanded that Dealer fully cure the 

default by September 22, 2023. Dealer failed to comply with the demands NMAC made upon it 

in the September 21, 2023 letter. 

13. NMAC continued to conduct floorplan inventory audits and identified additional 

defaults. As of October 3, 2023, Dealer had sold fourteen (14) SOT Vehicles to third-party 

customers and had failed to pay NMAC the amount financed on those 14 Vehicles. The amount 

in default for the sale of these 14 SOT Vehicles is $330,734.12. 

14. As of October 3, 2023, Dealer ceased operations as a retail automotive dealership. 

15. NMAC has performed all conditions, covenants and promises required of it in 

accordance with the terms and conditions of the Wholesale Agreement. 

16. As 

the Wholesale Agreement totaled $1,351,718.79, broken down as follows: 

Wholesale Agreement 

Principal Balance: $1,232,949.87 

Interest and Fees: $120,211.03 

Contractor & Vendor Fees: $12,489.73 

less suspense funds: ($13,931.84) 

Outstanding Balance: $1,351,718.79 

17. Beginning on or about October 7, 2023, NMAC repossessed its vehicle collateral 

that remained at 

18. On February 1, 2024, Dealer filed for relief under Chapter 7 of the Bankruptcy 

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Code. 

19. The 

ance owed under the 

Wholesale Agreement totals $1,351,718.79. Thus, the Repossessed Vehicle Collateral is worth 

approximately $655,218.79 less than what it is owed under the Wholesale Agreement. 

20. On March 14, 2024, the Chapter 7 Trustee filed a Report of No Distribution. 

21. NMAC has not disposed of the Repossessed Vehicle Collateral and seeks relief 

from the automatic stay to complete its disposition and apply any proceeds from the disposition 

to the balances Dealer owes NMAC. 

GROUNDS FOR VACATING AUTOMATIC STAY 

Nothing in § 362(d) expressly limits a secured creditor who seeks only to foreclose upon 

specific property from obtaining relief from the automatic stay. , 

847 F.2d 248, 250 (5th Cir. 1988); In re Timbers of Inwood Forest Assocs, Ltd., 793 F.2d 1380, 

1388 (5th Cir. 1986). Debtors carries the burden of proof on the issue of adequate protection. 11 

U.S.C. §§ 362(g) and 363(p). Debtor s business is closed and is not generating any operating 

capital to reopen the dealership or to pay NMAC the amounts that Debtor owes. 

Debtor cannot carry its burden on the issue of adequate protection, and Debtor is not in a 

position to provide NMAC with adequate protection. 

A. NMAC is Entitled to Relief from Stay for Cause, Including Lack of Adequate 

Protection 

stay depends upon whether a See 

In re Stembridge, 394 F.3d 383, 387 (5th Cir. 2004). 

NMAC is entitled to relief from stay for cause and lack of adequate protection pursuant to 

11 U.S.C. § 362(d)(1). Debtors are in default under the terms of the Loan Agreements and have 

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NMAC , which was repossessed prior to 

the bankruptcy filing, consist of depreciating assets that lose value every day. Debtor dealership 

is closed and is not selling vehicles or otherwise generating any income. Debtors carries the burden 

of proof on the issue of adequate protection. 11 U.S.C. §§ 362(g) and 363(p). The vehicle collateral 

 NMAC is not adequately protected 

and relief from stay should be granted pursuant to 11 U.S.C. § 362(d)(1). 

B. NMAC is Entitled to Relief Because there is Little or No Equity in the Vehicles 

for the Estate and the Vehicles are not Necessary for an Effective 

Reorganization 

NMAC is entitled to relief from stay pursuant to 11 U.S.C. § 362(d)(2). The total amount 

that the Debtors owes NMAC is approximately $1.35 million. 

NMAC maintains that, the value of the vehicle inventory is approximately $700,000. 

NMAC estimates that there is little to no value in Debtor s non-vehicle assets. 

Accordingly, NMAC asserts that it is undersecured. The total indebtedness owed to 

NMAC is approximately $1.3 million. This leaves NMAC undersecured in the approximate 

amount of $655,000. 

Debtors have no means to satisfy their secured creditors let alone their unsecured 

creditors. The dealership is closed and there is no pending sale of the dealership. There is no 

equity in the assets of the estate and, given this is a Chapter 7 proceeding, there is no likelihood of 

a reorganization that is in prospect. The Chapter 7 trustee has filed a report of no distribution. 

Accordingly, NMAC has satisfied the conditions to vacate the automatic stay as set forth under 

United Savings Ass'n of Texas v. Timbers of Inwood Forest Associates, Ltd., 484 US 365, 108 S.Ct. 

626, 98 L.Ed2d 740 (1988) and therefore is entitled to relief from the automatic stay under § 

362(d)(2). 

CONCLUSION 

For the reasons set forth above, NMAC respectfully requests that this Court: 

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1. Issue an order granting relief from the automatic stay authorizing NMAC to enforce 

its security interests in its Collateral including but not limited to disposing of NMAC

collateral pursuant to applicable law; 

2. Waive the 14 day waiting period under Bankruptcy Rule 4001(a)(3); 

3. Issue an order directing Debtors to turnover and surrender the Collateral to NMAC; 

and 

4. Enter such other and further relief as this Court deems necessary and proper. 

DATED: March 29, 2024 SEVERSON & WERSON 

A Professional Corporation 

By: /s/ Donald H. Cram 

 Donald H. Cram 

Attorneys for Secured Creditor 

NISSAN MOTOR ACCEPTANCE COMPANY LLC

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CERTIFICATE OF SERVICE

 The undersigned hereby certifies that a true and correct copy of the foregoing has been 

on the 30th day of March, 2024. 

 The undersigned also hereby certifies that a true and correct copy of the foregoing has been 

served by regular U.S. mail on the debtor at 3815 NW Pkwy., Dallas, TX 75225 on the 30th day of 

March, 2024. 

 

 /s/ Donald H. Cram 

 Donald H. Cram 

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