Public policy in New York prompted the establishment of, and recent increase to the Homestead Exemption (the “Exemption”), codified in the CPLR at §5206.  The Exemption, a statutorily created right, affords property owners (and their surviving heirs) certain protections from a creditor’s right to levy against a judgment debtor’s real property for the purpose of satisfying a personal money judgment.  The rationale behind the need for the Exemption is to ensure that a property owner is not left wholly insolvent once his primary residence is taken from him.

A recent decision in the protracted litigation by lenders of Extended Stay to recover under guaranties executed by owners of Extended Stay highlights the need for clear and unambiguous drafting in intercreditor agreements.

In re 18 RVC, LLC, Case No. 812-72378-reg (Bankr. E.D.N.Y., Oct. 22, 2012)

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Lewis Brothers Bakeries Incorporated v. Interstate Brands Corporation (In re Interstate Bakeries Corporation), 690 F.3d 1069 (8th Cir. 2012)

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Inre Brooke Capital Corp., 2012 WL 4793010 (Bankr. D. Kan., Oct. 5, 2012)

In re Tracy Broadcasting Corporation, No. 11-1453 (10th Cir., Oct. 16, 2012)

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In re Geijsel, et al., Case No. 10-43979-11 (Bankr. N.D. Texas, Aug. 24, 2012)

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In re Homebanc Mortgage Corp.,No. 07-51740-KJC, 2013 WL 211180 (Bankr. D. Del. Jan. 18, 2013)

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The Bankruptcy Court found that individual repurchase transactions having a purchase price of zero may fall within the definition of "repurchase agreement" under section 101(47) of the Bankruptcy Code provided that the master agreement governing such transactions acknowledges that each transaction constitutes consideration for every other transaction under the master agreement.

FACTUAL BACKGROUND

All too often, a secured creditor’s negotiation and litigation of chapter 11 plan confirmation issues centers disproportionately on the amortization schedule of a secured claim and lacks focus on other issues that shift risk or otherwise have significant economic impact on the relative rights of the parties.

In re Premier Golf Properties, L.P., BAP No. SC- 11-1508-HPaJu (9th Cir. BAP, Aug. 13, 2012)

CASE SNAPSHOT

The Ninth Circuit B.A.P. affirmed the bankruptcy court decision that post-petition income from greens fees and driving range fees were not “rents, proceeds, or profits” of the secured lender’s pre-petition blanket security interest on all real and personal property (and “all proceeds thereof”) within the meaning of section 552(b), and thus were not cash collateral.