Statutory construction is a holistic endeavor. A provision that may seem ambiguous in isolation is often clarified by the remainder of the statutory scheme -- because the same terminology is used elsewhere in a context that makes its meaning clear or because only one of the permissible meanings produces a substantive effect that is compatible with the rest of the law.
After a debtor filed a petition for reorganization under Chapter 11 of the Code, an undersecured creditor moved the Bankruptcy Court for relief from the § 362(a) stay on the ground that there was a lack of "adequate protection" of its interest within the meaning of § 362(d)(1). The Bankruptcy court granted relief, conditioning continuance of the stay on monthly payments by the debtor on the estimated amount realizable on the foreclosure that the stay prevented. The District Court affirmed, but on appeal, the Court of Appeals reversed holding that the undersecured creditor was not entitled to receive from respondent debtor, undergoing reorganization in bankruptcy, monthly payments for the use value of the loan collateral which the bankruptcy stay prevented petitioner from possessing.
Did the Court err in holding that the undersecured creditor was not entitled to monthly payments?
The Court affirmed the Court of Appeals, clarifying that the Bankruptcy Code provision protecting "interest in property" and allowing an unsecured creditor relief from an automatic stay on the grounds of lack of adequate protection did not include the undersecured creditor's purported right to an immediate foreclosure proceeding. Prepetition security interest did not reach property acquired postpetition.