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foreclosure sale were $721,599.97,2 which were distributed as
follows: (1) $669,176.55 was paid to FNB, (2) $13,149.91 was
paid for various closing costs, and (3) $39,273.51, the remaining
balance, was paid to FHA.
Petitioner maintains the 1986 foreclosure sale was invalid
because his property was transferred without either petitioner or
his spouse's permission. Petitioner stated in his brief that he
and his spouse sold 180 acres of farmland to their daughter and
son-in-law in July of 1986 for approximately $180,000. This sale
was allegedly a part of the foreclosure sale of approximately 652
acres of petitioner and his spouse's real estate.
On February 21, 1989, petitioner and his spouse filed for
voluntary bankruptcy under chapter 12 in the U.S. Bankruptcy
Court for the Central District of Illinois. On June 29, 1989,
the bankruptcy court found petitioner and his spouse to be
ineligible for relief under chapter 12 and converted the case
into a chapter 11 proceeding. On October 15, 1990, the
bankruptcy court denied petitioner and his spouse's motion
requesting the return of their allegedly wrongfully converted
farmland. The bankruptcy court found that the 1986 foreclosure
sale of approximately 652 acres of Illinois farmland was valid.
Petitioner and his spouse appealed the bankruptcy court's
2The statutory notice of deficiency in this case includes
$716,235 as the net proceeds from the sale of petitioner and his
spouse's farmland.
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