When a retail company enters bankruptcy, its most valuable asset routinely includes its interest as a tenant in unexpired commercial-space leases. Subject to certain limitations, the Bankruptcy Code permits the debtor-tenant to continue its operations in the profitable locations and “reject” the unprofitable stores, which are effectively abandoned back to the landlords.
In a case of first impression in the circuit, the Sixth Circuit Court of Appeals has applied Federal Rule of Civil Procedure 60(b) to revoke a bankruptcy trustee's "technical" abandonment of property. LPP Mortgage Ltd. v. Brinley, 547 F.3d 643 (6th Cir. 2008).
Historically, a credit bid in a chapter 11 sale has frequently been viewed as a "non-sale" event, and the parties did not feel an obligation to pay an investment banker, business broker, real estate broker or auctioneer (the professional) a commission for the result.
Selling Distressed Real Estate at Auction in Today's Market
Examples of how the current economic meltdown impacts the chapter 11 landscape are many. The unavailability of debtor-in-possession financing in most cases makes maintaining cash levels that much more important during the reorganization process.
Do you remember when advertising a "bankruptcy sale" attracted legions of deal-hungry bidders? Not anymore: The game has changed. Real estate disposition now requires new techniques to drive values and timely sales.
The House Judiciary Committee approved an amendment in the nature of a substitute for H.R.
A circuit split. State vs. estate. Textualism vs. pragmatism. Despite its promise, this year's Supreme Court Bankruptcy Code interpretation bout- Florida Dept. of Revenue v. Piccadilly Cafeterias Inc., 128 S.Ct. 2326 (2008)- was relatively dull. Pragmatism entered the ring disoriented and nervous, and was quickly k.o.'ed by textualism and the certainty of taxes.
In the past, a chapter 11 debtor's counsel might have opted to take advantage of a sale of assets under §363 of the Bankruptcy Code to avoid the delays and uncertainties of the plan confirmation process. On June 16, 2008, the U.S. Supreme Court in Florida Dept. of Revenue v.
For many businesses that operate in shopping centers, industrial complexes, office buildings or other leased property, nonresidential real property leases are often among the “crown jewels” of the company’s assets.
