Opinion ID: 393753
Heading Depth: 3
Heading Rank: 3

Heading: Other Collateral

Text: 23 Jonas' final contention is that material issues of fact existed regarding the SBA's disposition of other collateral. In Palmer's declaration supporting the SBA motion, he claimed that the SBA realized over $40,000 by auctioning Southland's inventory and equipment, and almost $3,700 from Southland's accounts receivable. Palmer referred to a life insurance policy and an interest in a note that Southland was required to provide under the terms of the original loan agreement, but stated that these two items were never forwarded to the SBA and thus not available for execution. Palmer's declaration was in part verified by a SBA Certified Statement of Account filed with the SBA motion. 24 Jonas contends that there are material issues of fact regading what happened to the two items of collateral that were never forwarded. Palmer's declaration, filed by the SBA, detailed the steps taken by his office to recover on the loan. Palmer specifically stated that the SBA never received the two items of collateral mentioned in the original loan agreement. For the purposes of a summary judgment motion, the SBA is not required to locate two items of collateral never received by its office, and perhaps never received by the original creditor, Santiago Bank. 10 25 Jonas also questions whether the accounts receivable were disposed of in a reasonable manner. After Southland entered into the compromise agreement on the loan, however, the trustee formally abandoned his right to the auctioned items, as well as the accounts receivable. In his application to the court, Jonas stated 26 it has been established by appraisals that the assets, including the accounts receivable, will not generate the amount due on the loan and, therefore, your applicant is asking this Court to allow him to abandon the personal property to the secured parties (Santiago Bank and the SBA) herein mentioned. 27 The trustee cannot now challenge the disposition of those assets; he agreed to abandon them with the knowledge that the secured creditors still retained a lien on the lawsuit proceeds. See 4A Collier on Bankruptcy P 70.42(4), at 512 (14th ed. 1978). 28 The declarations before the bankruptcy court do not raise material issues of fact regarding the SBA's disposition of collateral.