Interpreting a Guaranty: Teeny Typo Turns Into a Colossal Pain

WBCMT 2007 C33 Office 9720, L.L.C. v. NNN Realty Advisors, Inc. (5th Cir. 2016)

A noteholder sought to enforce a guaranty of a $17.5 million loan made to various entities for the purpose of acquiring tenant-in-common interests in a real estate project. The case turned on whether the term “Borrower” meant only the group of entities collectively or also included the entities individually. The District Court found in favor of the guarantor, and the noteholder appealed to the 5th Circuit. Continue reading

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Surrendering Property: The Consequences of Surrender Are … Take Your Pick

In re Elkouby, 561 B.R. 551 (Bankr. S.D. Fla. 2016)

A chapter 7 debtor filed a statement that he intended to surrender real property securing a loan. After the bankruptcy case was closed, the debtor continued actively opposing a foreclosure action. In response the mortgagee moved to reopen the case and asked the bankruptcy court to compel the debtor to surrender the property. The central issue was the meaning and consequences of “surrender.” Continue reading

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Avoiding Judicial Liens: Existing But Unenforceable v. Nonexistent

CRP Holdings, A-1, LLC v. O’Sullivan (In re O’Sullivan), 841 F3d 786 (8th Cir. 2016)

A chapter 7 debtor sought to avoid a judgment lien on the grounds that the lien impaired the debtor’s exemption. The bankruptcy court granted the debtor’s motion, the Bankruptcy Appellate Panel (BAP) affirmed, and the judgment creditor appealed to the 8th Circuit. Continue reading

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Plan Discharge and Injunction Provisions: Creditors Beware

In re Orleans Homebuilders, Inc., 561 B.R. 46 (Bankr. D. Del. 2016)

A reorganized debtor brought a motion in bankruptcy court to enforce a chapter 11 plan of reorganization injunction: It sought a court order directing a residential condominium association to discontinue litigation it brought in state court against the reorganized debtor and others relating to alleged construction defects. Continue reading

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What It Means to Cure a Default: Never Take Anything for Granted, the Rules Can Always Change

Pacifica L 51 LLC v. New Investments Inc. (In re New Investments Inc.), 840 F.3d 1137 (9th Cir. 2016)

The debtor proposed a chapter 11 plan that included curing defaults under a mortgage loan. The lender objected because the cure payments were calculated using the pre-default interest rate as opposed to the higher default rate. Continue reading

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Bankruptcy Estate: Would the Automatic Stay Protect a Squatter?

In re Castle Service, 560 B.R. 587 (Bankr. D. Utah 2016)

The debtor occupied but did not hold title to the real property where its business was located. A mortgagee seeking to foreclose on the property moved for a determination that the property was not an asset of the bankruptcy estate, and thus was not subject to the automatic stay. Continue reading

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Property Surrender: Surrender Means Surrender – No If’s, And’s or But’s

Failla v. Citibank, N.A. (In re Failla), 838 F.3d 1170 (11th Cir. 2016)

After chapter 7 debtors filed a statement of intention to surrender their house to their mortgagee, they continued to oppose the lender in a state court foreclosure action. The mortgagee argued that this breached their duty to surrender. Continue reading

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