The Seventh Circuit Court of Appeals recently handed down a decision with significant implications for landlords contemplating lease termination agreements with distressed tenants. Ruling on a direct appeal in the chapter 11 case In re Great Lakes Quick Lube LP, the court held that a lease termination agreement between a landlord and a financially distressed tenant can be voided as either a fraudulent conveyance or a preferential transfer in the tenant’s subsequent bankruptcy case. 

IN RE: RIVER EAST PLAZA, LLC (January 19, 2012)

When River East Plaza LLC defaulted on its mortgage in early 2009, LNV Corp., which held the first mortgage, started foreclosure proceedings. Shortly before the scheduled sale of the property, River East filed for bankruptcy. In its plan, it proposed to exchange LNV's lien for one that was an "indubitable equivalent" under section 1129(b)(2)(A)(iii). Bankruptcy Judge Wedoff (N.D. Ill.) rejected the plan and dismissed the petition. River East brought a direct appeal under section 158(d)(2)(A).

IN RE: HOLLY MARINE TOWING, INC. (January 6, 2012)

IN RE: RIVER WEST PLAZA - CHICAGO, LLC (December 22, 2011)

 IN RE: LONGVIEW ALUMINUM, L.L.C. (September 2, 2011)

MATRIX IV, INC. v. AMERICAN NATIONAL BANK AND TRUST CO. OF CHICAGO (July 28, 2011)

IN RE: GOLF 255, INC. (July 22, 2011)

TOWNSQUARE MEDIA v. BRILL (July 21, 2011)

Critics of last year’s decision on credit bidding by the Third Circuit Court of Appeals in the Philadelphia Newspapers chapter 11 case welcomed the Seventh Circuit’s recent unanimous opinion in River Road Hotel Partners LLC.

RIVER ROAD HOTEL PARTNERS v. AMALGAMATED BANK (June 28, 2011)