Opinion ID: 221739
Heading Depth: 1
Heading Rank: 2

Heading: Exception:

Text: Although it does not affect the result here, we do not agree with the bankruptcy court's determination that simply because the loan from the creditor, Datacom Investment Co., to Flamingo 55 and Broadway-Acacia was discharged by means of foreclosure on property, which secured that loan and was then owned by Grantham and Saba, it was not actually paid by Grantham and Saba within the meaning of 11 U.S.C. § 509(a). See Flamingo 55, 378 B.R. at 920 (part V.B.2). That is an overly restrictive reading of the words pay and payment in § 509(a). As other courts have recognized, payment is not to be taken in some technical sense, which refers to cash payments alone. See Aetna Cas. & Sur. Co. v. Chateaugay Corp. (In re Chateaugay Corp.), 89 F.3d 942, 948 (2d Cir. 1996); Feldhahn v. Feldhahn, 929 F.2d 1351, 1354 (8th Cir.1991). And here, while it is no doubt true that the actual cash came from foreclosure of a deed of trust on Grantham and Saba's property, the fact is that what was obtained thereby was the value of the property itself. That is, Grantham and Saba's valuable property was sold at foreclosure, and part of the cash proceeds was paid to Datacom to satisfy the debt. For this purpose, it really is no different from a sale by Grantham and Saba themselves with the proceeds used to pay the debt, and little different from a direct taking of that property by Datacom in payment of the debt. Thus, we reject that portion of the bankruptcy court's opinion. Therefore, we agree with the district court's ultimate determination and affirm the bankruptcy court's decision with the clarification and exception noted above. [7] AFFIRMED.