The Weinstein Company Holdings bankruptcy decisions clarify a buyer’s ongoing obligations under contracts purchased in bankruptcy, subject to resolution of appeals.

Executive Summary

TiBs frequently assign the right to recover debts due to the bankrupt’s estate. The advantage to the TiB is that he receives a lump sum or a share of the proceeds of a successful claim for the benefit of the bankrupt’s creditors without having to fund and pursue litigation himself. In most cases, once a TiB has assigned the right to recover the debt that will be the end of the matter; he just has to wait for the litigation to be concluded when payment of the agreed share will be made. A recent Court of Appeal decision means that this will not always be the case.

In the continuing uncertainty of the current economic climate, and with a tough financial regime introduced by the new government, landlords may still find themselves faced with an insolvent tenant.