In re Lanza
United States Bankruptcy Court for the Eastern District of Pennsylvania
51 B.R. 125 (1985)
First Peoples National Bank (First Bank) (plaintiff) originally advanced Lanza (defendant) $125,000 under a $200,000 mortgage, then advanced an additional $170,000 through separate unsecured loans never charged against that mortgage; after auditor criticism, First Bank issued Lanza a new $350,000 mortgage on the now-improved property, using roughly $125,000 to satisfy the original mortgage and $177,520 (plus interest) to discharge the unsecured debt. First Bank filed proof of claim in Lanza's bankruptcy but offered several different possible figures for the remaining balance owed; Lanza objected to the claim's amount based on First Bank's poor documentation.
Whether a creditor's bankruptcy claim, despite poor supporting documentation and internally conflicting testimony about the precise amount owed, retains a presumption of validity that the debtor must affirmatively overcome.