Category Archives: Financing

Fraudulent Transfer: “Reasonably Equivalent Value” Meets Debt Recharacterization

Official Comm. of Unsecured Creditors v. Hancock Park Capital II, L.P. (In re Fitness Holdings International, Inc.), 714 F.3d 1141 (9th Cir. 2013) – A chapter 11 unsecured creditors’ committee sought to recover payments made to the debtor’s shareholder as a fraudulent … Continue reading

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Cross-Collateralization: Your Dragnet Clause May Have at Least a Little Hole In It

Peoples National Bank, N.A. v. Banterra Bank, 719 F.3d 608 (7th Cir. 2013) – In this case, the district court had reversed the bankruptcy court – holding that a standard dragnet clause in a mortgage was not sufficient to secure a … Continue reading

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Cross-Collateralization: Beware the Intricacies of Local Real Estate Law

Hari Aum, LLC v. First Guar. Bank (In re Hari Aum), 714 F.3d 274 (5th Cir. 2013) – A debtor and its lender sought a determination of whether a mortgage on the debtor’s motel secured only a loan to the debtor, … Continue reading

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Foreclosure Sale As a Preference: “Strong Arm” Powers Strike Again

Nguyen v. Wells Fargo Home Mortgage (In re Nguyen), 490 B.R. 230 (Bankr. S.D. Tex. 2013) – An individual debtor in a chapter 7 bankruptcy brought an adversary proceeding seeking to recover from a mortgagee for negligent misrepresentation and to set aside … Continue reading

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Failure to Negotiate Mortgage Note: “Strong Arm” Powers With A Twist

Rogan v. Vanderbilt Mortgage & Finance, Inc. (In re Dorsey), 491 B.R. 464 (Bankr. E.D. Ky. 2013 – A chapter 7 trustee sought to use his “strong arm” powers as a hypothetical judgment lien creditor, arguing that a mortgage could be avoided … Continue reading

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Assignment of Rents: Absolute May Not Be So Absolute – Round 2

In re Augusta Center, LLC, 491 B.R. 298 (Bankr. S.D. Ga. 2013) – The debtor owned and operated a hotel property.  After it filed bankruptcy, it asked the court for authorization to use cash collateral (e.g. rents and revenues of the … Continue reading

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