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Just “Released” by the Third Circuit: In re Millennium Lab Holdings II Key Takeaways

In a highly anticipated decision issued last Thursday (on December 19, 2019), the United States Court of Appeals for the Third Circuit held in In re Millennium Lab Holdings II, LLC that a bankruptcy court may constitutionally confirm a chapter 11 plan of reorganization that contains nonconsensual third-party releases. The court considered whether, pursuant to the United States Supreme Court’s decision in Stern v. Marshall, 564 U.S. 462 (2011), Article III of the United States Constitution prohibits a bankruptcy court from granting such releases.

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, United States bankruptcy court
E.D.N.C. Bankruptcy Court rules that borrower can raise unfair and deceptive trade practices claims against lender based on refusal to modify loan

Does a lender have a duty to act in good faith when negotiating with a  borrower during a commercial loan modification?  In an order issued recently by the United States Bankruptcy Court for the Eastern District of North Carolina, in In re: Burcam Capital II, LLC, the court denied a lender’s motion to dismiss a borrower’s claims against the lender.  The Borrower alleged that the lender’s failure to modify the terms of the loan constituted a breach of the lender’s obligation to deal with the borrower in good faith, as well as an unfair or deceptive trade practice.&nbs

USA, Banking, Insolvency & Restructuring, Litigation, Poyner Spruill LLP, Debtor, Asset management, Foreclosure, Good faith, United States bankruptcy court
A new kind of PIN: essential requirements for recording deeds of trusts in North Carolina

The Fourth Circuit Court of Appeals recently ruled in the case of In Re: McCormick that a recorded North Carolina deed of trust indexed in a county’s grantor/grantee index may nevertheless be avoided by a trustee in bankruptcy if such county has elected a Parcel Identification Number (“PIN”) indexing system and the recorded deed of trust does not appear in such PIN index.  This alert briefly describes the PIN system in North Carolina and the McCormick decision’s impact on the need for PINs in deeds of trust recorded in North Carolina counties that have adopted the PIN

USA, North Carolina, Insolvency & Restructuring, Litigation, Private Client & Offshore Services, Real Estate, Poyner Spruill LLP
Bankruptcy court challenges to errors in deeds of trust and mortgages

As real estate-related bankruptcy filings remain steady, courts continue to see debtors challenging the validity of deeds of trust and mortgages due to minor scriveners’ errors.  The United States Bankruptcy Court for the Eastern District of North Carolina is viewed by debtors as a favorable venue in which to bring such challenges due to a string of prior rulings starting with In re Head Grading in 2006, which invalidated a North Carolina deed of trust that incorrectly cited the date of the related note by one day.  The latest chapter in this saga involves an effort by a

USA, North Carolina, Banking, Insolvency & Restructuring, Litigation, Poyner Spruill LLP, Bankruptcy, Debtor, Limited liability company, Deed of trust (real estate), United States bankruptcy court