In re MRI Beltline Industrial, L.P., 476 B.R. 917 (Bankr. N.D. Tex. 2012) –
In MRI Beltline the debtor moved for authority to use rents received from tenants of commercial buildings that it owned, and for a “carve out” to permit it to use rents for administrative expenses (including its attorney fees). In response, the mortgagee asserted that the debtor did not have any interest in the rents, and thus could not use them, because its assignment of rents was absolute. Continue reading
McClatchey v. GMAC Mortgage, LLC (In re Lacy), 483 B.R. 126 (Bankr. S.D. Ohio 2012) –
Lacy is one more in a long list of cases where an Ohio mortgage was attacked based on defects in execution. Although the Ohio statute requires only “substantial compliance” with the statutory execution requirements, mortgages are sometimes avoided based on seemingly trivial technical defects. Continue reading
In re Energy Conversion Devices, Inc., 483 B.R. 119 (Bankr. E.D. Mich. 2012) –
Damages arising from the rejection of a lease by a tenant in bankruptcy are subject to a cap under Section 502(b)(6) of the Bankruptcy Code. In this case the landlord managed to find a way to characterize part of its claim so that it was not subject to the cap. Continue reading
In re Hall, 483 B.R. 281 (Bankr. D. Conn. 2012) –
In Hall a residential tenant argued that the debtor landlord’s failure to return a security deposit gave rise to a non-dischargeable debt in his chapter 7 bankruptcy. Continue reading
In re Sundale, Ltd., 483 B.R. 23 (Bankr. S.D. Fla. 2012) –
Under Section 506(b) of the Bankruptcy Code, an oversecured mortgagee may be entitled to collect post-petition interest and reasonable attorney fees. In Sundale there was a request for attorneys’ fees and costs of ~$3.9 million in connection with a mortgage claim that was under $5 million at the time the case started and grew to ~$6.3 million during the case. The question for the court: were these fees reasonable? Continue reading
Huskey v. Citimortgage, Inc. (In re Huskey), 479 B.R. 827 (Bankr. E.D. Ark. 2012) –
Even minor errors can potentially lead to avoiding a mortgage in a bankruptcy. In this case the debtors tried several avenues of attack to avoid a mortgage based on deficiencies in the legal description and execution of the documents. Although they were not successful in obtaining summary judgment, the mortgagee also was not successful in having the matter resolved based on the pleadings, and a variety of issues were reserved for trial. Continue reading
Bankruptcy-RealEstate-Insights 