In a departure from prior precedent in the United States Bankruptcy Court for the Southern District of New York (SDNY), a recent opinion by Judge Michael E. Wiles in In re Cortlandt Liquidating LLC,[1] effectively lowered the Bankruptcy Code section 502(b)(6) cap on rejection damages that a commercial real estate landlord may claim, by holding that the cap should be calculated using the “Time Approach,” rather than the “Rent Approach.”
Calculation of Lease Rejection Damages
In New York, it is a standard practice to name all tenants residing in a building when foreclosing upon the property.
On Sunday, December 27, 2020, President Trump signed into law the Consolidated Appropriations Act, which provides $900 billion in a second wave of economic stimulus relief for industries and individuals faced with challenges from the COVID-19 coronavirus.
The COVID-19 pandemic has triggered unprecedented levels of business disruption and forced numerous companies into bankruptcy in an effort to preserve dwindling liquidity and postpone creditor demands. Retailers, whose brick-and-mortar locations were already struggling to adapt to an increasingly online marketplace, have been among the hardest hit. A number of bankruptcy judges, faced with the prospect of an avalanche of forced liquidations, have thrown these debtors a lifeline by approving requests to suspend lease payments.
If the current coronavirus (COVID-19) situation persists, real estate lenders increasingly will be faced with the need to restructure loans in their portfolios. Lenders that held non-performing real estate loans during prior real estate downturns (e.g., 2008, 1990s) have no doubt embarked on the real estate workout process countless times before. However, with the passage of time, the lessons learned by real estate lenders of earlier eras may have faded from memory. Moreover, many of the lenders active in real estate finance today were not even on the scene during prior recessions.
A summary of recent developments in insurance, reinsurance and litigation law.
Engelhart CTP v Lloyd's Syndicate 1221: Court holds that all risks cargo policy did not cover fraudulent documents for a non-existent cargo
Armes v Nottinghamshire County Council: Supreme Court again considers the nature of the relationship required to find a defendant vicariously liable
A summary of recent developments in insurance, reinsurance and litigation law.
This Week's Caselaw
Essar v Norscot: Court confirms that arbitrators can award the costs of litigation funding/time limits for challenging a corrected award
The 2010 Act has now been updated by regulations (the Third Parties (Rights against Insurers) Regulations 2016) to reflect changes in insolvency law. Accordingly, the long-awaited 2010 Act will finally come into force on 1 August 2016.
It will be recalled that the 2010 Act is intended to make it easier for third party claimants to bring direct actions against (re)insurers where an insured has become insolvent. The key changes coming in are as follows: