Designating Votes: Selfish Informed Self Interest v. Untoward Advantage

Pacific Western Bank v. Fagerdala USA-Lompoc, Inc. (In re Fagerdala USA-Lompoc, Inc.), 891 F.3d 848 (9th Cir. 2018) –

A secured creditor sought to block a Chapter 11 plan of reorganization by purchasing claims from some of the creditors in the general unsecured creditor class. At the debtor’s request, the bankruptcy court designated the votes of the purchased claims under section 1126(e) of the Bankruptcy Code. The district court affirmed and the secured creditor appealed to the Ninth Circuit.
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Avoiding an Unrecorded Mortgage: Variations on a Theme

Miranda v. Banco Popular De Puerto Rico (In re Mercado), 587 B.R. 224 (Bankr. D. P.R. 2018) –

A chapter 7 trustee sought to avoid an unrecorded mortgage and preserve the lien for the benefit of the bankruptcy estate. The decision on the trustee’s motion for judgment on the pleadings turned on treatment of the mortgage under state law. Continue reading

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Reverse Mortgages: Ignore Loan Documents at Your Peril

D’Alessio v. CIT Bank, N.A., 587 B.R. 211 (Bankr. D. Mass 2018) –

A chapter 13 debtor sought a court determination that he was a “Borrower” for purposes of a reverse mortgage executed by his deceased wife. The mortgagee disagreed contending that only his wife was a borrower, and consequently it (1) objected to treatment of its claim in the debtor’s chapter 13 plan and (2) moved for relief from the automatic stay so that it could foreclose. Continue reading

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Mortgage Assignee Claims: Hang on To That Promissory Note

In re Benyamin, 587 B.R. 243 (Bankr. S.D. N.Y. 2018) –

Chapter 11 debtors objected to a proof of claim that appeared to be filed by a servicer on behalf of an assignee of the original mortgagee. The court considered both standing and grounds for disallowing the claim. Continue reading

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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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