Sale Contract for Mineral Interests: Speak Early and Often, Or Forever Hold Your Peace

Posted on March 14, 2014 by BankruptcyRealEstateInsights

Davis v. Dunmore Properties, Inc. (In re Davis), 503 B.R. 609 (Bankr. M.D. Pa. 2013) –

After confirmation of their chapter 13 plan, two chapter 13 debtors filed motions for summary judgment seeking to reject a contract for sale of their mineral rights and disallowance of the buyer’s proof of claim.  The buyer argued that the agreement was not an executory contract, and so could not be rejected.  Alternatively, if the agreement was considered an executory contract, the buyer argued that it was entitled to damages as provided in Section 365(i) of the Bankruptcy Code. Continue reading →

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Default Interest: Is a Mortgagee Entitled to Collect the Contract Rate, or Must It Be Reasonable?

Posted on March 11, 2014 by BankruptcyRealEstateInsights

In re Haldes, 503 B.R. 441 (Bankr. N.D. Ill. 2013) –

An oversecured mortgagee’s proof of claim included default interest for the period from the date of the bankruptcy filing through confirmation of a plan of reorganization.  The debtor argued that during this post-petition period the mortgagee was entitled to interest only at the pre-default rate, while the mortgagee argued that it was entitled to interest at the contract default rate. Continue reading →

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Environmental Enforcement: Sometimes Bankruptcy Provides a Respite, and Sometimes It Doesn’t

Posted on March 7, 2014 by BankruptcyRealEstateInsights

In re Edison Mission Energy, 502 B.R. 830 (Bankr. N.D. Ill. 2013) –

Pre-bankruptcy the Sierra Club filed a citizen suit complaint with the Illinois Pollution Control Board (IPCB) against a power company requesting penalties and an order requiring it to cease violating state environmental regulations by reducing sulphur dioxide emissions from its coal plants.  After the power company and a number of its affiliates filed bankruptcy, the Sierra Club asked the bankruptcy court to either confirm that the automatic stay was not applicable on the basis that the IPCB proceeding was as an action to enforce police or regulatory powers, or alternatively to grant relief from the stay for cause to permit the action to go forward. Continue reading →

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Bankruptcy Sales: Sometimes the Mortgagee Wins

Posted on March 4, 2014 by BankruptcyRealEstateInsights

In re CPJFK, LLC, 496 B.R. 290 (Bankr. E.D.N.Y. 2011) –

A chapter 11 trustee sought court approval of a Section 363 sale of the debtor’s hotel to its secured creditor for a credit bid of ~$13.8 million.  The debtor raised a number of objections, including that the bid was too low, the property was not adequately marketed and the court did not have jurisdiction. Continue reading →

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Bankruptcy Sales: Acquiring Related Contracts (Whether the Debtor Cooperates or Not)

Posted on February 28, 2014 by BankruptcyRealEstateInsights

Popgrip, LLC v. Brown’s Chicken & Pasta, Inc. (In re Brown’s Chicken & Pasta, Inc.), 503 B.R. 86 (Bankr. N.D. Ill. 2013) –

A debtor who was a restaurant franchisor sold substantially all of its assets in a bankruptcy auction.  The buyer did not receive all of the equipment that it thought was included in the sale, and discovered a franchise agreement that it wanted to have assigned long after the normal sale related executory contract process had been completed.  It sought a court order (1) directing turnover of the missing equipment (or a judgment for the value of the equipment), and (2) confirming that it was successful in assignment and assumption of the franchise agreement. Continue reading →

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Bankruptcy Sales: “Free and Clear” – Round 2

Posted on February 25, 2014 by BankruptcyRealEstateInsights

In re Christ Hospital, 502 B.R. 158 (Bankr. D. N.J. 2013) –

The buyer of a chapter 11 debtor’s assets sought to enforce a bankruptcy court order approving the sale “free and clear” of interests:  it asked the bankruptcy court to enjoin a state court action brought against it by a competitor that included economic tort claims relating to the buyer’s acquisition. Continue reading →

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