Objection to secured claim of second mortgage creditor overruled.  The second mortgage creditor obtained a pre-petition state court judgment against the Debtor.  The note evidencing the indebtedness owed to such creditor merged into the judgment.  However, under North Carolina law the deed of trust securing the indebtedness remains in place.

The Bankruptcy Administrator filed a motion to dismiss the Debtors' case pursuant to Bankruptcy Code section 1307(c) based on a lack of good faith in light of the misrepresentations and omissions in their schedules.  In their case the Debtors provided timely responses to the auditor, provided creditble explanations for their omissions and misstatements, and promptly amended their schedules.  Considering the totality of the circumstances in this case , a dismissal on the basis of bad faith is not warranted.

The court granted in rem relief to the creditor pursuant to its motion for relief from stay under 11 U.S.C. § 362(d)(4), whereby a third party, not the debtor, engaged in a scheme to delay or hinder the creditor's foreclosure proceedings in certain real property with multiple purported transfers of title.

The Debtor filed its current case on the next to the last day of the upset bid period following a report of foreclosure sale on its real property.  The Debtor's prior Chapter 11 case was dismissed earlier after the automatic stay had been lifted on the Debtor's property and no substantial assets remained in the case.  The current case was dismissed pursuant to 11 U.S.C. § 1112(b) based upon a lack of subjective good faith in filing the current case, the objective futility of the Debtor's reorganization, and the lack of any material change of circumstances from the time of the dismissal of the prior case to the filing of the current case.