Avoidance Recoveries: Who Can Be Sued And When?

Posted on January 31, 2014 by BankruptcyRealEstateInsights

Securities Investor Protection Corp. v. Bernard L. Madoff Inv. Securities LLC, 501 B.R. 26 (S.D.N.Y. 2013) –

The debtor (Madoff Securities) made payments to “feeder funds” that provided its funding, and the feeder funds in turn made payments to their investors, fund managers, and other entities.  The trustee sought to avoid transfers from Madoff Securities, and to recover the transfers from both the feeder funds and their subsequent transferees.  This decision addressed the parameters for recovery from the subsequent transferees. Continue reading →

Posted in Uncategorized | Tagged , , | Leave a comment

Bankruptcy Sale: A Potpourri of Issues

Posted on January 28, 2014 by BankruptcyRealEstateInsights

In re Scimeca Found., Inc., 497 B.R. 783 (Bankr. E.D. Pa. 2013) –

A chapter 7 trustee sought court approval for a sale of the debtor’s property and resolution of related issues over the objections of the debtor.  In granting the trustee’s request, the court reviewed various issues that commonly come up in connection with bankruptcy sales, including the standard for review of the trustee’s proposed sale, bases for selling property “free and clear,” and the effect of a sale on leases. Continue reading →

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

Unrecorded Mortgage Assignment: If You Snooze, You Can Lose

Posted on January 24, 2014 by BankruptcyRealEstateInsights

In re First Mortgage Fund, Inc., 498 B.R. 180 (E.D. Mich. 2013) –

A debtor (First Mortgage), which was the mortgagee of record, foreclosed a mortgage and obtained title to the foreclosed property notwithstanding that it had assigned the note and mortgage to another party several years before the foreclosure sale.  After the assignee sought to make a claim based on the assignment, the debtor’s chapter 7 trustee sought to avoid the rights of the assignee using his strong-arm powers.  After the bankruptcy court found in favor of the chapter 7 trustee, the assignee appealed. Continue reading →

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

Control Of An LLC: Who Comes Out On Top – A Bankrupt Member Or The Member’s Chapter 7 Trustee?

Posted on January 21, 2014 by BankruptcyRealEstateInsights

In re B&M Land and Livestock, LLC, 498 B.R. 262 (Bankr. D. Nev. 2013) –

A chapter 7 debtor that was the sole member and manager of a limited liability company filed a chapter 11 bankruptcy on behalf of the LLC.  The United States Trustee filed a motion to dismiss the LLC bankruptcy petition on the basis that the bankrupt member did not have standing to file bankruptcy on behalf of the LLC. Continue reading →

Posted in Uncategorized | Tagged | Leave a comment

Underwater Liens: Can A Federal Tax Lien Be Stripped Off In A Chapter 13?

Posted on January 17, 2014 by BankruptcyRealEstateInsights

Ryan v. United States of America (In re Ryan) 725 F.3d 623 (7th Cir. 2013) –

A chapter 13 debtor sought to void a federal tax lien under Section 506(d) of the Bankruptcy Code to the extent that it exceeded the value of his assets.  The 7th Circuit joined the 10th Circuit in holding that the Supreme Court’s interpretation in Dewsnup applies in chapter 13 cases to preclude lien stripping under 506(d). Continue reading →

Posted in Real Estate | Tagged , | Leave a comment

Claim Priority: Construction Lien Meets Mortgage – Who Wins?

Posted on January 14, 2014 by BankruptcyRealEstateInsights

ROK Builders, LLC v. 2010-1 SFG Venture LLC (In re Moultonborough Hotel Group, LLC), 726 F.3d 1 (1st Cir. 2013) –

After the owner of a newly constructed hotel filed bankruptcy, the assignee of the construction mortgage sought a declaration that the mortgage had priority over the general contractor’s mechanic’s lien.  The general contractor contended that its mechanic’s lien had priority, and filed a dozen counterclaims for good measure.  After losing before the bankruptcy court and district court, the general contractor appealed to the 1st Circuit. Continue reading →

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