The Seventh Circuit affirmed a district court’s ruling that a debtor-in-possession (“DIP”) lender had breached its financing agreement, barring its claim for commitment and funding fees from the DIP. Arlington LF, LLC v. Arlington Hospitality, Inc., No. 09-3560, 2011 WL 727981, *9 (7th Cir. March 3, 2011), aff’g No. 08 C 5098, 2011 WL 3055350 (N.D. Ill. Sept. 18, 2009). Although the DIP itself had also breached the agreement, that breach was not, in the court’s view, effective until after the lender had already “walked away.” Id. at *6.
Introduction
Island One, Inc. to Emerge from Bankruptcy
Anyone in the commercial real estate business can tell you that the past couple of years have seen a significant uptick in the number of commercial foreclosures and owner bankruptcies. While it does appear that the market is improving, we’re certainly not out of the woods. We are likely to see headlines declaring the latest big bankruptcy or foreclosure for a few more quarters. Sometimes lost in the headlines is the impact such issues have on the tenants in these commercial properties.
A recent bankruptcy case in Pennsylvania,In re Shubh Hotels Pittsburgh, LLC, 439 B.R. 637 (Bankr. W.D. Pa. 2010), held that as long as the “debtor-in-possession” exercises its sound business judgment when making its decision, the “debtor-in-possession” can enter into a new 15-year franchise agreement over the objection of the secured lender.
Introduction
Introduction
A Delaware bankruptcy judge recently held that a landlord's right of first refusal to purchase a debtor/tenant's liquor license (the "Option") was unenforceable since the debtor rejected the lease containing the Option1. Disagreeing with a ruling of the First Circuit Court of Appeals2, the Delaware court held that the Option provision was a non-severable part of an executory contract that was not subject to specific performance.
The Facts
The United States Court of Appeals for the Seventh Circuit issued its much anticipated decision in In Re River Road Hotel Partners, LLC, __ F.3d __ (7th Cir., June 28, 2011). In the closely watched case, the Seventh Circuit declined to follow the Third Circuit’s decision in Philadelphia Newspapers, 599 F.3d 298 (3d Cir. 2010), holding instead that secured lenders have the right to credit bid in “free and clear” asset sales where their liens are being stripped, whether those sales occur under section 363 of the Bankruptcy Code or under a chapter 11 plan.
The Nevada Legislature has amended the state’s consumer reporting laws to remove restrictions on the information a credit reporting agency may report to gaming operators. With the passage of Senate Bill 409, a credit reporting agency is no longer prohibited from reporting to gaming licensees information about a job applicant regarding bankruptcies older than ten years, other civil judgments older than seven years, and criminal convictions older than seven years.