Effective March 31, 2009 (not April 1), Georgia lien law is officially set to undergo a series of substantial changes, as a result of Governor Sonny Purdue signing Senate Bill 374 into law. These changes are significant and exist throughout the lien statutes. Many of the revisions require new, very specific procedures and forms that must be precisely followed in order to prevent waiving lien rights. Although the new lien law is not technically retroactive, it appears that several of the requirements could pertain to liens filed prior to March 31.  

As our economy slides into what could be a long and severe recession, retail bankruptcies are expected to increase. Landlords are presented with a myriad of problems when one of their tenants files for bankruptcy. Although many of the obligations and rights of landlords are well established by current bankruptcy law, a novel question arises when a tenant files for bankruptcy while a landlord is in the process of constructing tenant improvements or is on the verge of providing a tenant allowance. Given the tenant’s right to reject its lease, a landlord is faced with a difficult decision.

On November 14, 2008, a letter was sent to derivatives counterparties of Lehman Brothers Holdings Inc. and its affiliates (collectively, “Lehman”) notifying them of Lehman’s Motion to Settle or Assign Derivative Contracts. The letter concerns a motion filed in the bankruptcy court by Lehman Brothers Debtors on November 13, 2008, which seeks to establish two procedures relating to its pre-petition derivative contracts with counterparties.

The Treasury Department announced that it will purchase $40 billion in senior preferred stock from the American International Group (AIG) as part of a comprehensive plan to restructure federal assistance to the systemically important company. Together with steps taken by the Federal Reserve, this restructuring will improve the ability of the firm to execute its asset disposition plan in an orderly manner. AIG will use the equity to pay down $40 billion of the Federal Reserve's secured lending facility.

On September 15, 2008, Lehman Brothers Holdings Inc. filed a voluntary petition for bankruptcy protection, commencing the largest bankruptcy case in U.S. history. Initially, it appeared that many of the operating subsidiaries would remain outside of bankruptcy, but during the past several days, many of them have filed bankruptcy petitions as well. As of this writing, a complete list of the bankrupt Lehman entities (collectively, “Lehman”) is as follows:

Many clients have asked us for guidance as to the basic mechanics of dealing with the Lehman bankruptcy. Although this list is not exhaustive, we have set forth below some of the issues that you may want to think about. (This guidance is with respect to transactions entered into under the 1992 ISDA Master Agreement, and capitalized terms used herein are defined in that agreement.

In Monday’s 7-2 decision in Florida Department of Revenue v. Piccadilly Cafeterias, Inc., the Supreme Court of the United States held that the exemption from state transfer and stamp taxes in Section 1146(a) of the Bankruptcy Code does not apply to transfers that take place prior to the time the Bankruptcy Court confirms a reorganization plan. Section 1146(a) had been cited by bankruptcy debtors and their asset purchasers in seeking tax exemptions for Section 363 sales and other pre-confirmation transfers.

In re Bryan Road, LLC, 2008 WL 376773 (Bankr. S.D. Fla. 2008), the Bankruptcy Court for the Southern District of Florida concluded on February 12, 2008, that a borrower could and did waive the protections of the Bankruptcy Code’s automatic stay in a pre-bankruptcy workout agreement with its lender and thus lifted the stay to enable the lender to hold a foreclosure sale.

A recent decision out of a North Carolina bankruptcy court has reopened the question of whether a physical supply contract may qualify as a forward contract or swap agreement for purposes of the Bankruptcy Code. Although previous U.S. case law determined that those terms included commodity supply agreements, the U.S. Bankruptcy Court for the Eastern District of North Carolina disagreed.