In connection with a proposed sale of real property, a chapter 11 debtor sought to prohibit the mortgagee from submitting a credit bid. It contended that there was “cause” based on its argument that the mortgagee’s claims were subject to a bona fide dispute.
In re 1701 Commerce, LLC, 477 B.R. 652 (Bankr. N.D. Tex. 2012) –
The capital stack for Presidio Hotel Fort Worth, L.P. consisted of (1) a senior loan of $39.6 million from Dougherty Funding, LLC, (2) a junior loan from Vestin Originations, Inc. and (3) a 20-year tax agreement with the City of Fort Worth pursuant to which the City made annual grant payments.
In circumstances where a debtor lacks mental capacity to deal with a statutory demand and subsequent bankruptcy petition, the court will rescind or annul a bankruptcy order.
In the current economic climate, there are a number of key issues facing borrowers in the event of lender insolvency or default.
Committed facilities/term loans
Provided they are fully drawn and the borrower is not in breach itself, the impact in the short term may not be too severe.
A guarantor can be made bankrupt where the terms of the guarantee create a debt obligation.
An agreement to pay off part of a judgment debt owed jointly with others will not of itself amount to consideration sufficient to prevent a creditor going against a debtor for the unpaid balance of the judgment.
The court has held that a statutory demand is valid despite the high default interest rate on an underlying loan.
The bankrupt’s trustee applied for a possession order of his home. The bankrupt unsuccessfully appealed his bankruptcy, the order in litigation that had led to his bankruptcy and the possession order, but he refused throughout to give up possession and applied for a committal order. The court found the bankrupt in contempt of court for failing to give possession and sentenced him to six months’ imprisonment.
Knowing how much money you owe and are owed is critical when considering disputes with other parties. You need to consider whether a right of set-off exists between you and the other party.