Shopping Center Leases: Some Ins and Outs of Use and Exclusivity Provisions

Toys “R” Us, Inc., 587 B.R. 304 (Bankr. E.D. Va. 2018) –

The debtors sought court approval of the assumption and assignment of a shopping center lease. The landlord objected on the grounds that the assignment would not comply with exclusivity provisions in another tenant’s lease and would disrupt the tenant mix. Thus, it did not comply with the requirement that the debtors provide adequate assurance of future performance. Continue reading

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Leases: Prepetition Termination May Be A Get Out of Bankruptcy Free Card – Or Not

In re Indiana Hotel Equities, LLC, 586 B.R. 870 (E.D. Mich. 2018) –

The debtor leased nonresidential real property under a lease that was terminated before the bankruptcy petition was filed. The lessor filed a motion seeking a bankruptcy court order confirming that the automatic stay did not apply to its efforts to obtain possession of property. Continue reading

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Mortgagor Claims: There is A Limit to the Ability to Invoke the Assistance of Federal Courts

Zapotocky v. CIT Bank, N.A., 587 B.R. 589 (S.D.N.Y. 2018) –

A former debtor sued a mortgagee in federal district court claiming a breach of contract by the lender and challenging a foreclosure judgment entered in state court. This is one of several different proceedings used by the debtor as a forum to avoid a foreclosure sale. The lender moved to dismiss the case on various grounds. Continue reading

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Condominium Assessments: When Is Postpetition Really Prepetition?

Goudelock v. Sixty-01 Ass’n of Apartment Owners, 895 F.3d 633 (9th Cir. 2018) –

A condominium association sought a determination of the dischargeability of a chapter 13 debtor’s personal liability for postpetition assessments on a condo unit. The bankruptcy court determined that the assessments are nondischargeable; the district court affirmed; and the debtor appealed to the Ninth Circuit. Continue reading

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Delinquent Property Tax Procedures: To Stay or Not to Stay

In re Administrative Order Regarding Sale of Tax Certificates by Florida Tax Collectors, FLMB 2018-1, 583 B.R. 794 (Bankr. M.D. Fla. 2018) –

In response to repeated requests for comfort orders, a bankruptcy court issued a district wide administrative order confirming that the automatic stay did not apply to the post-petition sale of tax certificates for delinquent property taxes owed on property owned by a debtor in bankruptcy. Continue reading

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Preferences: Judgment Creditors May Find Themselves Exposed Given the Nature of Judgment Liens

Karim v. Bayview Loan Servicing, LLC (In re Karim), 582 B.R. 193 (Bankr. N.D. Ill. 2018) –

Chapter 11 debtors sought to avoid prepetition transfers to a judgment creditor as preferences. The debtors received a check in connection with the sale of real estate. The judgment creditor asserted a statutory lien and then obtained a state court order requiring the debtors to turn over the check to the creditor. Continue reading

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Who Gets to Keep the Money: Sometimes Procedural Arguments Can Matter as Much as Substantive Arguments

Allison v. Centris Fed. Credit Union (In re Tri-State Financial, LLC), 885 F.3d 528 (8th Cir. 2018) –

A Chapter 11 trustee brought a proceeding to determine ownership of ~$1.2 million. Initially the bankruptcy court held that the funds were not property of the bankruptcy estate. After an appeal, a remand, a change in judges, a new opinion, and further appeals, the case ended up before the Eighth Circuit. In addition to the substantive issue, the procedural issues relating to the extent to which a judge may revisit decisions made earlier in the case became a focal point. Continue reading

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