Opinion ID: 2136864
Heading Depth: 1
Heading Rank: 2

Heading: Delay for Restructuring

Text: Asbridges ask for a remand to present another restructuring plan to the Bank under the Agricultural Credit Act of 1987. The trial court determined that the Bank complied with the procedural requirements of the Act and the Policy and that the substantive decision to deny the... Asbridge's application for restructuring was made in accord with the Act and Policy. The trial court concluded that there is no evidence that the decision to deny the application for restructuring was an abuse of discretion ... or a decision reached in an arbitrary, capricious, unreasonable or unconscionable manner. From our review, we agree with the trial court. Asbridges argue in generalities that they were denied procedural due process and denied a proper evaluation of their restructuring plan. Procedurally, Asbridges argue that they were not given any criteria... by which to determine how to formulate a plan of restructuring and that they were denied any opportunity to amend their plan. The trial court found, however, that the Bank had properly notified Asbridges of the restructure application process and [that] the forms enclosed therein[ ] conformed with the requirements of the [applicable] Seventh District [Farm Credit Services] Policy. The trial court determined that Asbridges were notified that [they] could meet with a representative of the [Bank] to review the status of [their] loan, [their] financial condition, the suitability of [their] loan for restructuring, and the possibility of developing a plan for restructuring. Instead, the Asbridges did nothing to approach the Bank about the acceptable range of restructuring options before proposing their plan. As the trial court found, Asbridges proposed that their debt be reduced from $1,200,000 to $256,000 although the market value of the ranch was then appraised by the Bank at $698,070. Asbridges also proposed that this reduced debt be reamortized over a 30-year term at 9% interest, although market interest rates were then 12%. The trial court found that the Bank properly rejected the proposal[] on the basis [] that the cost of restructuring far exceeded the cost of foreclosure. Only if the lender determines that the potential cost of restructuring a loan is less than or equal to the potential cost of foreclosure, must the lender restructure the loan. 12 U.S.C. § 2202a(e)(1); Federal Land Bank of St. Paul v. Bosch, 432 N.W.2d 855, 858 (N.D.1988). The trial court found that the Bank adhered to the requirements of its policy [i]n determining the difference between the cost of restructure versus the cost of foreclosure and that the facts utilized ... were in accordance with the Policy, and were appropriate and rational. We agree. The trial court's findings are supported by the evidence and are not clearly erroneous. The trial court concluded that the Bank's decision to deny the application for restructuring was [not] an abuse of discretion... or a decision reached in an arbitrary, capricious, unreasonable or unconscionable manner. On appeal, we do not disturb the trial court's determination about the lender's compliance with federal regulations on forbearance or restructuring unless the abuse-of-discretion standard of review was misapprehended or grossly misapplied. Federal Land Bank of St. Paul v. Overboe, 404 N.W.2d 445, 450 (N.D.1987). Asbridges' proposed plan was out of kilter with the applicable criteria that were properly used by the Bank to calculate and compare the costs of restructuring with the costs of foreclosure. Since Asbridges themselves failed to submit a restructuring plan in keeping with applicable criteria, they were not denied a fair opportunity to restructure. Moreover, when their application to restructure was denied, Asbridges were notified: If you have information pertaining to your proposal that was not previously submitted, you need to complete a new proposal which includes the previously submitted and new information. Asbridges chose not to submit anything further. The Agricultural Credit Act of 1987 does not command interminable efforts at restructuring, but only constrains foreclosure until the lender has completed any pending consideration of the loan for restructuring.... 12 U.S.C. § 2202a(b)(3); Farm Credit Bank of St. Paul v. Huether, 454 N.W.2d 710 (N.D.1990). We affirm the trial court's determination that the Bank fairly considered and refused Asbridges' restructuring plan under the applicable federal criteria. We see neither an equitable reason nor a federal directive to prolong this much delayed foreclosure to allow Asbridges another chance to apply for restructuring.