Dishi & Sons v. Bay Condos LLC, 510 B.R. 696 (S.D.N.Y. 2014) –
In approving the sale of a Chapter 11 debtor’s assets, a bankruptcy court found that a tenant of the debtor was entitled to continue in possession of the leased portion of the sold property for the remainder of its lease. The successful bidder at the sale appealed, arguing that the sale was “free and clear” of the tenant’s interests.
In nearly every bankruptcy proceeding there is some constituency that ends up having its claim or interest impaired. Not surprisingly, therefore, these same constituencies would like to avoid that outcome by restricting the debtor’s ability to commence bankruptcy in the first place.
Earlier this month, in Davis v. Carrington Mortgage Services, LLC, et al., the United States District Court for the District of Nevada held that consumer reporting agencies are not obligated to determine the legal status of debts. The Court also reinforced the plausible pleading standard for Fair Credit Reporting Act cases, while providing an overview of CRAs’ obligations under the act.
In preparing a merchant cash advance (MCA) agreement on behalf of the provider, there is constant tension between the urge to include every conceivable contractual right for protecting the provider’s economic interests and the need to avoid language that might reorder the parties’ relationship in a way that renders the entire agreement unenforceable. Deciding how to address the possibility that the merchant might pursue bankruptcy poses a particularly challenging dilemma.
The Northern District of Illinois recently held that a collection letter sent to a consumer’s attorney seeking payment on a debt discharged in bankruptcy did not violate the Fair Debt Collection Practices Act based on the “competent lawyer” standard. The case is Grajny v. Credit Control, LLC, No. 18-C-2719, 2018 U.S. Dist. LEXIS 173682, 2018 WL 4905019 (N.D. Ill. Oct. 9, 2018).
Both landlords and tenants are well served to begin discussing exclusives early in the lease negotiations.
Walro v. The Lee Group Holding Co., LLC (In re Lee), 524 B.R. 798 (Bankr. S.D. Ind. 2014) –
A chapter 7 trustee sought a court determination that (1) a debtor’s voting rights in a limited liability company (LLC) were property of the bankruptcy estate, and (2) other members of the LLC violated the automatic stay by taking action to remove the debtor as a member and terminating his voting rights.