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As discussed at greater length below, on June 30, 1986, the
foreclosure sale was held as scheduled, DOE purchased the
project’s mortgaged assets, and ANR filed an appeal of the
foreclosure proceeding.
The Foreclosure Proceedings
DOE Initiates Foreclosure Proceedings
As previously noted, on August 29, 1985, DOE had initiated
proceedings in the United States District Court for the District
of North Dakota (the District Court) seeking foreclosure of the
mortgage and sale of the mortgaged property. The Government
moved for summary judgment. The partnership resisted, contending
that the foreclosure should be conducted in accordance with North
Dakota law, which it contended gave the partnership redemption
rights for up to 1 year after the foreclosure sale.
District Court Decision
On January 14, 1986, the District Court granted the
Government’s motion for summary judgment, holding that Federal
law applied and gave the partnership no redemption rights. In
its memorandum and order, however, the District Court observed
that there was no precedent involving this particular loan
guarantee program, that a determination under the balancing test
of United States v. Kimbell Foods, Inc., 440 U.S. 715 (1979), was
a “close question”, and that of the various options presented to
the Court by the parties, “All have merit”.
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