Opinion ID: 604935
Heading Depth: 3
Heading Rank: 3

Heading: Loss Attributable to Automatic Stay

Text: 29 A third argument the Trustee makes in support of its contention that Nalley failed to establish an administrative expense claim is that Nalley failed to demonstrate that the loss in value of the collateral was attributable to the automatic stay. Relying on In re Falwell Excavating Co., Inc., 47 B.R. 217 (Bankr.W.D.Va.1985), the Trustee asserts that when a creditor acquiesces to some harm to its collateral for business or other reasons, any alleged impairment of value may not be attributed solely to the automatic stay. The Trustee alleges that Nalley presented no evidence of any steps it took to preserve or protect its collateral or to require strict compliance on the part of the debtor. 30 In Falwell Excavating Co., the creditor had made a business decision to not enforce strict compliance with an adequate protection order for a period of over two years, although the adequate protection payments, if made on time, would have protected the creditor from all of the diminution in value of the collateral. In this case, even if the debtor had made all of its adequate protection payments, Paccar still would have suffered an unprotected diminution in the value of the tractors. Furthermore, no evidence suggests that Paccar, or Nalley as successor-in-interest, made a business decision not to pursue adequate protection. Because neither Nalley nor Paccar acquiesced in the harm to the tractors and because the adequate protection payments would not have covered the diminution, we find no indication that Nalley's loss was caused by anything other than the imposition of the stay, Paccar's forbearance from foreclosing, and the continued use of the trucks by Debtor.