Opinion ID: 501876
Heading Depth: 2
Heading Rank: 3

Heading: Sale of the Sewer Easement

Text: 26 Probasco asserts that the bankruptcy court lacked authority to sell Probasco's interest in the sewer easement adjacent to Quail Meadows and abused its discretion in ordering the sale. The only consideration for the easement, $25,000, was paid by Probasco. Probasco agreed to pay the sum based upon his status as a partner with Eads in Quail Meadows. 27 The bankruptcy court found that the sewer easement was an integral part of the development and use of Quail Meadows and that it had no substantial value other than as part of the development. The court also found that partition of Parcels 2 and 3 from Parcel 1, or the sale of Eads' interest in Parcel 2, Parcel 3, and the sewer easement separate from Probasco's interest, would be impractical and would yield a substantially smaller price than sale of the whole. Consequently, any detriment to Probasco was outweighed by the benefits of the sale. 28 Title 11 U.S.C. Sec. 363(h) (1982 & Supp. IV 1986) specifically authorizes a sale of property, including a co-owner's interest, on findings such as those made by the court: 29 (h) ... the trustee may sell both the estate's interest, under subsection (b) or (c) of this section, and the interest of any co-owner in property in which the debtor had, at the time of the commencement of the case, an undivided interest as a tenant in common, joint tenant, or tenant by the entirety, only if-- 30 (1) partition in kind of such property among the estate and such co-owners is impracticable; 31 (2) sale of the estate's undivided interest in such property would realize significantly less for the estate than sale of such property free of the interests of such co-owners; 32 (3) the benefit to the estate of a sale of such property free of the interests of co-owners outweighs the detriment, if any, to such co-owners; 33 .... 34 The trustee's authorization to sell is not dependent on whether the debtor is the sole owner of the property. Because the authorization of section 363(h) is discretionary, we review the bankruptcy court's decision for abuse of discretion. 35 Probasco's principal argument is that the bankruptcy court could find that Eads had a one-half interest in the sewer easement only if it also found that Eads had no more than a one-half interest in all of Quail Meadows. Although we do not believe that Probasco's ownership of a one-half interest in all of Quail Meadows is necessary to justify the bankruptcy court's order, in view of our holding on constructive notice, there can be no serious question that the bankruptcy court did not abuse its discretion in ordering the sale of Probasco's interest in the sewer easement.