Pre-confirmation Bankruptcy Sale: When Can You Hurry up and Sell?

In re MCSGlobal Inc., 562 B.R. 648 (Bankr. E.D. Va. 2017)

A chapter 11 trustee sought court approval of a sale of substantially all of the debtor’s assets prior to confirmation of a plan of reorganization. The purchase agreement terms included release of claims against the buyer and a bar order precluding creditors from bringing similar claims. A creditor objected. Continue reading

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Lease Rejection: What Happens When the Landlord and Tenant Are Both in Bankruptcy?

In re Railyard Co., LLC, 562 B.R. 481 (Bankr. D. N.M. 2016)

Both the landlord and an affiliated tenant filed bankruptcy. The landlord’s trustee filed a motion to reject the lease in the landlord’s case and filed a motion for relief from the automatic stay in the tenant’s case to permit litigation of the rejection motion. The bankruptcy judge issued a single opinion for both cases. Continue reading

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Chapter 13 Plans: Start With The Standard Local Plan, And Then What? (Not Much)

In re Sperry, 562 B.R. 1 (Bankr. D. Mass. 2016)

The debtors’ chapter 13 plan included a provision requiring the first mortgagee to send the debtors monthly mortgage loan statements. The mortgagee argued that this made the plan unconfirmable. Continue reading

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UCC Debtor Name: To Avoid Disaster Dot All of The I’s and Don’t Forget the T’s

Mainsource Bank v. Leaf Capital Funding, LLC (In re Nay), 563 B.R. 535 (Bankr. S.D. Ind. 2017)

A bank brought an adversary proceeding seeking a determination of the validity and priority of the competing lien of an equipment lender. The bank also objected to the proof of claim filed by the equipment lender. The case turned on the effect of a minor error in the equipment lender’s UCC financing statement. Continue reading

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Avoiding Mortgages (Again): Consider Carefully the Form of Execution / Acknowledgment When Using a Power Of Attorney

HSBC Bank USA, N.A. v. Lassman (In re DeMore), 844 F.3d 292 (1st Cir. 2016)

A chapter 7 trustee sought to avoid a mortgage using his strong arm powers based on an improper acknowledgment by a person executing the mortgage under a power of attorney. The bankruptcy court ruled in favor of the trustee; the district court reversed; and the trustee appealed to the 1st Circuit. Continue reading

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Interpreting a Guaranty: Teeny Typo Turns Into a Colossal Pain

WBCMT 2007 C33 Office 9720, L.L.C. v. NNN Realty Advisors, Inc., 844 F.3d 473 (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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