Debt Recharacterization, Etc.: Standing, Standing and More Standing

Elswick Co., LLC v. Comm2013 CCRE12 Crossings Mall Road LLC (In re Tara Retail Group, LLC), 595 B.R. 215 (Bankr. N.D. W.Va. 2018) –

An unsecured tenant creditor brought an adversary proceeding to recharacterize or equitably subordinate a $17 million claim filed by the assignee of a deed of trust. The secured creditor moved to dismiss for lack of standing. Continue reading

Posted in Financing | Tagged , | Leave a comment

Joint Tenants: The Case of The Disappearing Interest

Cohen v. Chernushin (In re Chernushin), 911 F.3d 1265 (10th Cir. 2018) –

After a debtor’s postpetition death, a chapter 7 trustee brought an adversary proceeding seeking to sell a second home that had been owned by the debtor and his nondebtor wife as joint tenants with right of survivorship. The wife objected arguing that the bankruptcy estate no longer had any interest in the property. The bankruptcy court ruled in favor of the wife; the district court agreed; and the chapter 7 trustee appealed to the 10th Circuit. Continue reading

Posted in Real Estate | Tagged , | Leave a comment

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

Posted in Real Estate | Tagged | Leave a comment

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

Posted in Financing | Tagged | Leave a comment

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

Posted in Financing, Real Estate | Tagged | Leave a comment

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

Posted in Bankruptcy Sales, Real Estate | Tagged , , | Leave a comment

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

Posted in Real Estate | Tagged , , | Leave a comment