9th BAP - In re Weinstein - Conversion to 7 - Chapter 13 Trustee, in Las Vegas, still required to pay the Secured Creditor with Funds on Hand? Yes, especially when you don't object!

The 9th Cir BAP in an unpublished decision sustained local bankruptcy Judge Mike Nakagawa in his decision to require the Chapter 13 Trustee to disburse funds to the secured creditor. 

In a nutshell, Debtors file bankruptcy in order to stop a potential foreclose.  The Debtor's plan gets confirmed which requires adequate protection payments to be distributed by the Trustee to the Creditor while the Debtors attempt to modify their loan.  For some unknown reason as it is not stated in the motion but I am curious why... the Trustee does not distribute to the secured creditor and the Debtor does not make post-petition payments.  A motion for relief is filed with a request that the Court order the Trustee to distribute the funds.  The initial motion for relief gets continued and then taken off calendar as the parties enter into an agreed order.  On the same day as the agreed order, the Debtor converts to a Chapter 7.  Two days later the second motion for relief is filed which also  requests the Court to order the Trustee to turnover  the funds to the creditor.  No opposition is filed but the Debtor's counsel appears and apologizes for not filing an opposition and argues.  The Court grants the motion for relief but continues the request for disbursement.  At the continued hearing, the Debtor still failed to file an opposition but argues the motion.  The Court grants the motion noting that no one filed an opposition.  The Debtor files a motion to reconsider.  The BAP affirms both orders....

I point out that you should always file an opposition if your going to oppose!

In re Weinstein