Should valuation of real property be considered as of the petition (filing) date? The confirmation date? Some date in between? The issue can be important; property can deteriorate or rise in value between the filing of a bankruptcy case and the date of confirmation, especially if the two are separated by a long period of time.
In In re Fuqua, the gap was nearly three years from the date of filing until the date of the confirmation hearing. The debtor had two investment properties she proposed to “cram down” to fair market value; however, in the three years since filing the properties had risen considerably in value. The debtor proposed to use the value as of the filing date as the cramdown value; the creditors objected.
In an opinion that reviewed the varying positions of courts having considered the issue, the Bankruptcy Court for the Eastern District of Michigan held that, under the circumstances, valuation should be at or near confirmation, not as of the date of filing.