Bank loaned money to corporate debtors, guaranteed by individual debtors, who were owners and principals of the corporations. In connection with the loans, debtors provided bank with promissory notes and trust deeds to real property. Debtors failed to pay the notes when they came due six months later, but the parties entered into a sale and leaseback arrangement, under which, bank would be given a new note in the amount of accrued interest owed on the loans, bank would "buy" equipment from debtors, on which they would make "lease" payments to bank, in repayment of the original notes. This arrangement was based on bank's policy that notes must be paid within one year, whereas lease obligations could be paid over five years. The promissory notes were never marked "paid," and the trust deeds were not reconveyed. After debtors filed chapter 11 petitions, bank moved for relief from stay. In response, debtors argued that the sale and leaseback agreement was a "novation," which meant bank was an unsecured creditor. Bank, however, argued that the leaseback was merely a modification or extension of the original loans. The court ruled that the leaseback agreement was not a novation because bank clearly did not intend to release debtors from the original notes, which is required under state law, and debtors had not presented any evidence regarding their own intent. Therefore, bank's claim remained secured by the trust deeds.