The recent decision from the United States District Court for the Eastern District of Michigan, ECP Commercial II LLC v. Town Center Flats, LLC (In re Town Center Flats, LLC), gives us at the Weil Bankruptcy Blog a reason to revisit the issue of “absolute” assignments of rent.

When is a claim contingent? When is a claim subject to a bona fide dispute and who has the burden of proof? When is a claim against a person? When is a claim too small to count? When is an alleged debtor generally not paying his debts as they come due? Are we there yet?

OVERVIEW

“We’re riding down the boulevard,
We’re riding through the dark night,
With half the tank and empty heart,
Pretending we’re in love, when it’s never enough, nah.”

The property industry has seen a dramatic decline in capital values over the last two years with peak to trough falls of approximately 44 per cent compared to a peak to trough decline of approximately 27 per cent during the recession of the early 1990s. This, together with the effect of the challenging economic climate, has led to a number of high profile insolvencies of property owners, developers and occupiers. Given the uncertain economic outlook, it is likely that these trends will continue.