Bankruptcy and Real Estate Litigation

Subscribe to Bankruptcy and Real Estate Litigation via RSS

Never a dull moment.  We at Crunched Credit are probably guilty of excess and perhaps myopic focus on our federal government and its regulatory apparatus; it is such a consistently reliable source of commentary and outrage.  So here’s one out of left field, but no less important for that. 
Continue Reading “First” Deeds of Trust now Second in Line?

Typically, from deal to deal, I don’t (and can’t imagine many of my colleagues do) get too worked up about Article 9 of the UCC…I know what it says, I know what to do, especially when it comes to creating and perfecting creditors’ security interests in collateral. But this year, I have reason to pause, as the 2010 Amendments to UCC Article 9, which have been adopted by more than 40 states (but not NY (and some others)—as of yet) went into effect on July 1, 2013.Continue Reading Brief Summary of Key UCC Article 9 Amendments Effective July 1, 2013

A recent decision out of the Bankruptcy Court for the Northern District of New York has brought greater certainty to the interpretation of what qualifies as an “interest” when determining the scope of a Section 363(f) “free and clear” sale in bankruptcy. The decision in In re Tougher Industries, Inc. became the latest in…

Last October, I wrote about a scheme employed, in three separate bankruptcy cases, by debtors seeking to evade the absolute priority rule in order to keep the real property owned by the debtor in the hands of the ‘family’ at the expense of the debtors’ creditors.Continue Reading When Lenders are the Losers in Bankruptcy Court…Well, Not so Fast

This is about bad law in the bankruptcy courts, but let us instructively begin with Charlie Brown. Bear with me. Everyone knows the classic Peanuts comic strip, which features the running joke of Lucy and Charlie Brown playing football – Charlie Brown goes to kick the football, only to have Lucy pull it away at the last second, leaving Lucy laughing and Charlie Brown on his back. Every time, Lucy promises Charlie Brown that this time she will let him kick the ball. Charlie Brown, blithely ignoring the obvious, goes to kick the football. Lucy, of course, pulls the ball away again, every time.Continue Reading Fool Me Once…: When Lenders are the Losers in Bankruptcy Court

May a Chapter 11 plan permit a debtor to auction property free and clear of a creditor’s lien while preventing that creditor from credit-bidding the amount of its debt?  A question that split the U.S. Circuit Courts was settled when earlier this week the Supreme Court came out 8-0 on the side of the secured creditors in a decision of paramount interest to lenders with bankrupt borrowers (Justice Kennedy took no part in the decision).

The concise, 12-page opinion penned by Justice Scalia in RadLAX Gateway Hotel v. Amalgamated Bank concludes that the debtor’s proposed auction procedures – which prevented the secured creditors from being able to credit-bid – could not satisfy the Code’s requirement that a cramdown be “fair and equitable” to non-consenting secured creditors.  Earlier cases from the 3rd, 5th and 7th Circuits had created a split that called into question what had been, for many, an accepted tenant of the 363 sale – that a secured creditor could protect itself from the potential of a depressed auction price by credit bidding and obtaining the auctioned asset for its own account.Continue Reading SCOTUS’ RadLAX Decision Affirms Lenders’ Rights to Credit Bid in Chapter 11

Recently, the Ninth Circuit Court of Appeals brought smiles to the faces of many lenders (especially Bank of America, the appellee and secured lender) when it refused to combine the assets of related debtors without a substantive consolidation order and held that a single asset real estate debtor will be treated as a single asset real estate debtor.Continue Reading If It Looks Like a Duck, err, a SARE Debtor…