On occasion, an owner files a chapter 7 bankruptcy during or in connection with an association’s foreclosure.  While that chapter 7 bankruptcy may slow that foreclosure, it will absolutely not end it.  A chapter 7 bankruptcy ‘stays’ that foreclosure, sure.  That chapter 7 bankruptcy stay remains in effect with respect to “property of the estate” until it that property (the unit) is no longer property of the estate.  During the course of a chapter 7 bankruptcy, the bankruptcy trustee eventually ‘abandons’ the property of the estate.  Once that ‘abando

A recent case¹ decided by Judge Stuart Bernstein of the United States Bankruptcy Court for the Southern District of New York demonstrates that a developer's properly crafted chapter 11 plan of reorganization can effectively "restore" trust funds that it previously had "diverted" under the New York Lien Law.

A decision issued earlier this year by a Florida bankruptcy court¹ provides comfort to those who accept payment from a debtor-in-possession in return for goods or services. The court held that to invoke the jurisdiction of a bankruptcy court in a lawsuit to recover an alleged impermissible post-petition transfer by a debtor, the plaintiff must establish that the debtor's estate was diminished as a result of the transfer to the defendant.

Congratulations!  You just successfully negotiated a prepackaged chapter 11 plan of reorganization for a multi-billion dollar enterprise which leaves general unsecured creditors unimpaired and has been unanimously approved by the debtors' creditors.  It's smooth sailing from here, right?

In Radlax Gateway Hotel, LLC v.

A recent opinion from the United States Bankruptcy Court for the Western District of New York shows that even the best laid strategies can return to haunt the insiders of a debtor.  In Wallach v.

Prepayment provisions are intended, in part, to protect lenders in a depressed market from losses resulting from the costs of replacing their loans sooner than expected and having to relend at rates lower than those originally charged.  A New York federal district court recently upheld a bankruptcy judge's ruling denying a lender's claim for a $7.5 million prepayment premium against a borrower-debtor.¹ The lender must have been both surprised and disappointed to learn from the courts' decisions that this result could have been avoided had the lender's loan documents included

Senior lenders often insist that subordinate lenders assign to them, under subordination and intercreditor agreements, their right to vote on a plan of reorganization proposed for the borrower should it end up in chapter 11.  The intention of such assignments is to prevent junior lenders from facilitating or preventing confirmation of bankruptcy plans contrary to the desires of senior lenders.  Lenders should be aware, however, that courts disagree whether such plan voting rights assignments are enforceable.  In fact, the United States Bankruptcy Court for the District of Mas

Introduction

The U.S. Bankruptcy Court for the District of Delaware ruled that an affiliate that held an indirect ownership interest in, and was a lender to, an employer could be liable for severance payments under the Federal WARN Act. In order for liability to apply to the affiliate, the affiliate and employer need to be found to constitute a "single employer" for Federal WARN Act purposes.