Editor: David Reiss
Brooklyn Law School

December 2, 2012

Federal Bankruptcy Court in Idaho Rules that MERS was not a Party in Interest and Lacked Standing to Bring Motion for Stay of Relief

By Rafe Serouya

In In re Sheridan, 08-20381-TLM, 2009 WL 631355 (Bankr. D. Idaho Mar. 12, 2009), the Idaho Bankruptcy court held that a party making a motion for stay of relief must be a party in interest. This was defined to mean that the motion must be brought by one who has a pecuniary interest in the case and, in connection with secured debts, by the entity that is entitled to payment from the debtor and to enforce security for such payment. That entity is the real party in interest. It must bring the motion or, if the motion is filed by a servicer or nominee or other agent with claimed authority to bring the motion, the motion must identify and be prosecuted in the name of the real party in interest

The Court held for the bankruptcy trustee in finding that MERS, the movant, was not the party in interest and the identity of the holder of the note appears to be a fact in dispute. Movant also failed to provide an adequate record showing it was a party in interest with standing entitled to seek relief.

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