Equitable Subordination: Construction Lenders Beware

Posted on December 23, 2014 by BankruptcyRealEstateInsights

Atlantic Builders Group, Inc. v. Old Line Bank (In re Prince Frederick Inv., LLC), 516 B.R. 778 (Bankr. D. Md. 2014) –

A construction contractor contended that the claim of the debtor’s construction lender should be equitably subordinated based on the fact that the lender (1) approved payment applications and change orders, and (2) did not disclose to the contractor that there were insufficient funds to complete construction of the project. Continue reading →

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Mortgage Recording: What Happens When There Is An Extra “E”?

Posted on December 19, 2014 by BankruptcyRealEstateInsights

Weiss v. JPMorgan Chase Bank, N.A. (In re Thibault), 518 B.R. 635 (Bankr. D. Mass. 2014) –

A chapter 7 trustee sought to avoid a mortgage using his “strong-arm” powers on the basis that it was not properly recorded because the spelling of the debtor’s last name in the mortgage was not the “correct” spelling. Continue reading →

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Mortgage Recording Requirements: Tiny Technical Defect Strikes Again

Posted on December 16, 2014 by BankruptcyRealEstateInsights

Rogan v. U.S. Bank, N.A. (In re Partin), 517 B.R. 770 (Bankr. E.D. Ky. 2014) –

A chapter 7 trustee sought to avoid mortgages on three properties using his “strong arm” powers, arguing that they were improperly recorded and thus did not provide constructive notice to a purchaser or lien creditor. Continue reading →

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Recorded Documents: Who Loses When A Document Is Not Properly Indexed?

Posted on December 12, 2014 by BankruptcyRealEstateInsights

Agin v. Dookhan (In re Hultin), 516 B.R. 190 (Bankr. D. Mass. 2014) –

A chapter 7 trustee sought to avoid a transfer of the debtor’s real property using his “strong arm” powers based on an argument that the deed conveying the property did not provide constructive notice since it was not properly indexed in the real estate records. Continue reading →

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Leases: Avoid Unnecessary Headaches With Precise Drafting

Posted on December 9, 2014 by BankruptcyRealEstateInsights

Charter v. Kearney (In re Colen), 516 B.R. 618 (Bankr. D. Or. 2014) –

A chapter 7 trustee sued the tenants’ landlord to recover payment of a fee that he contended was illegal under state law.  The issue turned on whether a “move in” fee paid at the beginning of the lease term was illegal under a statutory provision applicable to residential leases. Continue reading →

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Bankruptcy Sales: It Is A Good Idea To Confirm You Are Acquiring Everything You Need Before You Close

Posted on December 5, 2014 by BankruptcyRealEstateInsights

Agri Star Meat & Poultry, LLC v. Nevel Properties Corp. (In re Nevel Properties Corp.), 765 F.3d 846 (8th Cir. 2014) –

The purchaser of assets from one bankruptcy debtor objected to the plan of reorganization filed by a related bankruptcy debtor because the plan did not recognize the purchaser’s rights in a deep water well pursuant to a lease between the two debtors.  The bankruptcy court determined that the buyer did not acquire any rights to the well, the district court affirmed, and the buyer appealed to the 8th Circuit. Continue reading →

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