Evert E. and Eva F. Berglund - Page 6

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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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