Leases: Prebankruptcy Termination May Not Mean That the Landlord Is Out Of the Woods

Posted on September 7, 2016 by BankruptcyRealEstateInsights

Official Comm. of Unsecured Creditors v. T.D. Investments I, LLP (In re Great Lakes Quick Lube LP), 816 F.3d 482 (7th Cir. 2016) –

A chapter 11 debtor relinquished 2 leases prior to filing bankruptcy. The unsecured creditors’ committee sought to avoid the lease termination transaction as a preference or a constructive fraudulent transfer. The bankruptcy court ruled against the committee and the district court affirmed, so the committee appealed to the 7th Circuit. Continue reading →

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Recording Requirements: When “Duly Acknowledged” Is Not Enough

Posted on August 31, 2016 by BankruptcyRealEstateInsights

DeGiacomo v. First Call Mortgage Company (In re Reznikov), 548 B.R. 606 (Bankr. D. Mass. 2016) –

A chapter 7 trustee sought to avoid a recorded mortgage based on a defective acknowledgment and then to preserve the lien of the mortgage for the benefit of the bankruptcy estate. The mortgagee objected – arguing that the acknowledgment was sufficient, and the debtor objected – claiming a homestead exemption in the property. Continue reading →

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Bankruptcy Filing Veto: Better Follow the Playbook

Posted on August 24, 2016 by BankruptcyRealEstateInsights

In re Lake Michigan Beach Pottawattamie Resort LLC, 547 B.R. 899 (Bankr. N.D. Ill. 2016) –

A mortgage lender moved to dismiss a chapter 11 bankruptcy case filed on the eve of foreclosure without the lender’s consent (in its role as a special member of the debtor) on the grounds that the case was filed in bad faith and the filing was not authorized. Continue reading →

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Default Interest: There’s Prepetition Interest and Postconfirmation Plan Interest – Don’t Forget About What Happens in the Middle

Posted on August 17, 2016 by BankruptcyRealEstateInsights

Wells Fargo Bank, N.A. v. Beltway One Development Group, LLC (In re Beltway One Development Group, LLC), 547 B.R. 819 (9th Cir. BAP 2016) –

A creditor objected to confirmation of a chapter 11 plan of reorganization because it did not include default interest for the period prior to the effective date of the plan. The bankruptcy court approved the plan over the creditor’s objections, and the creditor appealed to the 9th Circuit Bankruptcy Appellate Panel (BAP). Continue reading →

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Broker Listing Agreement: Seller Beware – Be Sure You Get What You Paid For Before You Have To Pay

Posted on August 10, 2016 by BankruptcyRealEstateInsights

In re Cimarron Group, Inc., 545 B.R. 646 (Bankr. D. Mont. 2016) –

A real estate broker filed a proof of claim in a chapter 7 bankruptcy contending that it was owed a commission based on a pre-bankruptcy listing agreement. The debtor objected, arguing that the broker had not earned the commission. Continue reading →

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Abandonment: Better Think Twice Because There is No “Do Over”

Posted on August 3, 2016 by BankruptcyRealEstateInsights

In re Haber, 547 B.R. 252 (Bankr. S.D. Ohio 2016) –

A foreclosure sale that occurred after a chapter 7 trustee abandoned the foreclosed property (and after the bankruptcy case was closed) unexpectedly resulted in surplus proceeds that were to be returned to the debtor. After the trustee intervened in the state court case to claim the proceeds and reopened the debtor’s bankruptcy case to administer the proceeds on behalf of the bankruptcy estate, the debtor amended his bankruptcy schedules to claim a homestead exemption in the proceeds. Continue reading →

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