In order to confirm a chapter 11 reorganization plan, a debtor must satisfy all of the provisions of § 1129(a) of the Bankruptcy Code, except for § 1129(a)(8), which requires that each class of creditors either (1) accept the proposed plan or (2) is unimpaired under the proposed plan. When a debtor fails to meet § 1129(a)(8), the debtor can “cram down” a dissenting unimpaired secured creditor pursuant to § 1129(b), but only if the plan is “fair and equitable” with respect to that creditor.
Two recent decisions have provided guidance concerning the scope of a lender’s right to collect “rents” generated by a debtor in possession, and the debtor’s corresponding ability to use those “rents” in furtherance of its restructuring efforts: In re Ocean Place Development LLC[1] and In re Soho 25 Retail LLC.
Two sections of the Bankruptcy Code seemingly stand at odds regarding the protections offered to lessees of real property owned by a bankrupt debtor. Section 365(h) strongly protects a lessee’s right to possession of real property in the face of debtor’s rejection of the lease.
Although a wealth of case law has found pre-petition bans on bankruptcy filings to be unenforceable as a matter of public policy, a recent unpublished decision from the Tenth Circuit Bankruptcy Appellate Panel (BAP) upheld a pre-petition ban included as an amendment to an operating agreement. [1] The debtor, DB Capital Holdings LLC, was
A potential conflict among circuit courts regarding § 1129(b)(2)(A) of the Bankruptcy Code may soon exist. In a recent decision, Hon.
To confirm a chapter 11 plan under the so-called "cramdown option," at least one impaired class of creditors must accept the proposed plan. [1] To accept a plan, more than one half (in number) of the voting claimants in a class, representing at least two-thirds of the total dollar amount of voting claims in such class, must vote to accep
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
