Few words in real estate transactions inspire as much fear as "time is of the essence." If a closing date or other deadline is time-is-of-the-essence (TOTE), neither party can postpone the closing or extend the deadline without the other party's consent. So if a buyer is unable to timely close (often because they are unable to obtain financing) and the seller is unwilling to postpone the closing, the buyer may forfeit its security deposit and lose a valuable business opportunity. The consequences for failing to meet a TOTE closing are harsh and seemingly unavoidable.
Avoiding a fraudulent transfer to the Internal Revenue Service (“IRS”) in bankruptcy has become easier, or at least clearer, as a result of a recent unanimous decision by a panel of the Court of Appeals for the Ninth Circuit, Zazzali v. United States (In re DBSI, Inc.), 2017 U.S. App. LEXIS 16817 (9th Cir. Aug. 31, 2017).
The U.S. Court of Appeals for the Ninth Circuit recently affirmed final judgments against corporate borrowers and guarantors in three separate cases, holding that:
(a) the Nevada statute limiting the amount of the deficiency recoverable in a foreclosure action was preempted by federal law as applied to transferees of the Federal Deposit Insurance Corporation (FDIC);
(b) the plaintiff bank had standing to enforce the loans it acquired from the FDIC;
(c) the bank was not issue-precluded from showing that the subject loans had been transferred to it;
In In re Hungry Horse, LLC, Adversary Proceeding No. 16-11222 (Bankr. D. N.M. September 20, 2017) (“Hungry Horse”), the New Mexico Bankruptcy Court reminded us that many U.S. Supreme Court opinions can be limited in scope and do not necessarily dispose of all potential remedies to an issue.
The Bankruptcy Code prohibits a chapter 13 debtor from modifying a mortgage lien on the debtor's principal residence. Even in situations in which a secured creditor fails to file a proof of claim or otherwise participate in the bankruptcy proceeding, the Bankruptcy Code allows a secured creditor's lien on a primary residence to pass through the bankruptcy unaffected. However, a recent decision from a bankruptcy court in Texas illustrates the risks to secured creditors of blind reliance on these statutory protections.
Last week, in Assured Guaranty Corp. v. Fin. Oversight and Mgmt. Bd. for Puerto Rico, No. 17-1831, 2017 U.S. App. LEXIS 18387 (1st Cir., Sept. 22, 2017), the U.S. Court of Appeals for the First Circuit issued a noteworthy decision in the Puerto Rico quasi-bankruptcy proceedings. Overturning the district court’s ruling, the Court of Appeals held that the Puerto Rico Oversight, Management, and Economic Stability Act (“PROMESA”), 48 U.S.C.
The bankruptcy bar is abuzz following the Supreme Court’s recent decision in Czyzewski v. Jevic Holding Corp., 15-649, 2017 BL 89680, 85 U.S.L.W. 4115 (Sup. Ct. March 22, 2017), holding that bankruptcy courts may not approve structured dismissals that do not adhere to the Bankruptcy Code’s priority scheme.
Breach letters have been heavily litigated in many states, but up until now, Alabama has generally stayed out of the fray. Not any longer. In September 2017, the Supreme Court of Alabama found that failure to strictly comply with the requirements of the mortgage invalidates a foreclosure sale. Ex Parte Turner, __ Ala__ (2017). In this case, after the borrowers defaulted on their loan, the loan servicer sent a letter notifying them of its intent to foreclose on the property (the “Default Letter”).
Some “D&O policies” (Directors and Officers liability policies) exclude claims for losses “arising out of” the prior wrongful acts of officers or directors. The Eleventh Circuit recently interpreted the phrase “arising out of” broadly, finding that it is not a difficult standard to meet. Zucker for BankUnited Financial Corp. v. U.S. Specialty Insurance Co., -- F.3d -- , 2017 WL 2115414, *7 (2017) (determining that under Florida law “‘arising out of’ . . . has a broad meaning even when used in a policy exclusion”); but see Brown v. American Intern.