Landlord Bankruptcy: A Tenant Is Not Out of Options If the Landlord Rejects Its Lease

IDEA Boardwalk, LLC v. Revel Entertainment Group, LLC (In re Revel AC Inc.), 909 F.3d 597 (3rd Cir. 2018) –

A tenant that elected to retain its rights under a commercial lease after a debtor landlord rejected the lease sought clarification of its rights and moved for summary judgment. The bankruptcy court granted the motion in part; a purchaser of the leased property appealed; the district court affirmed; and the purchaser appealed again to the Third Circuit. Continue reading

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Discharge of Debt: A Seller Relying on a Buyer’s Assumption of Debt May Be Out of Luck If the Buyer Files Bankruptcy

Recanati v. Roberts (In re Roberts), 594 B.R. 484 (Bankr. N.D. Fla. 2018) –

In connection with acquisition of a restaurant the debtor agreed to assume debts of the business. After the debtor filed a chapter 7 bankruptcy, the former owners sought to except this obligation from discharge. Continue reading

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Avoiding Mortgages: What Happens When A Stranger to The Transaction Files a Discharge in Error?

Kelley v. Ocwen Loan Servicing, LLC (In re Bowers), 595 B.R. 869 (Bankr. M.D. Ga. 2018) –

A chapter 7 trustee sought to avoid a security deed based on the fact that as of the petition date satisfactions of the security deed had been recorded. The secured party contended that its security interest was still enforceable because the satisfactions had been recorded in error, and alternatively asked for equitable recognition of its interest by subrogation or reinstatement. Continue reading

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Selling Real Estate Free and Clear: The Trustee Does Not Always Win

Belfance v. Shelton (In re Shelton), 593 B.R. 755 (Bankr. N.D. Ohio 2018) –

A chapter 7 trustee sought a determination of rights in connection with seeking authority to sell property free and clear of other interests using its power of a hypothetical bona fide purchaser of real property under section 544(a)(3) of the Bankruptcy Code. The court addressed both the interests held by the bankruptcy estate and the impact of constructive notice on the rights of a hypothetical bona fide purchaser. Continue reading

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Tax Lien Foreclosures: Property Tax Collection Meets Fraudulent Transfers – Who Wins?

Hampton v. Ontario County, New York, 588 B.R. 671 (W.D. N.Y. 2018), 588 B.R. 671 (W.D. N.Y. 2018) –

The debtors sought to set aside prepetition property tax foreclosures as constructively fraudulent transfers. The bankruptcy court granted the government’s motion to dismiss on the grounds that the price paid at a tax foreclosure sale that was regularly conducted in accordance with state law was conclusively presumed to be “reasonably equivalent value” for the property. The debtors appealed to the district court. Continue reading

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Sales Free and Clear: The Devil Is in the Details

In re Bridge Assoc. of Soho, Inc., 589 B.R. 512 (Bankr. E.D. N.Y. 2018) –

The debtor filed a motion to sell a residential loft building free and clear of possessory rights of the occupants. The bankruptcy court determined that the occupants had statutory rights of possession that could not be stripped in a bankruptcy sale. Continue reading

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Construction Subcontractor Claims: Is a Subcontractor Merely a Creditor of a Creditor Without Standing?

In re Alliance Consulting Group LLC, 588 B.R. 169 (Bankr. S.D. Miss. 2018) –

A subcontractor sought to reopen a bankruptcy case so that it could assert an administrative expense claim for work it did on a chapter 11 debtor’s facility. The bankruptcy court determined that the subcontractor did not have standing, and even if it did, the subcontractor did not establish cause to reopen the case. Continue reading

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