The Consumer Financial Protection Bureau (CFPB) recently reopened the comment period for its proposed amendments to the mortgage servicing related rules under RESPA and TILA that generally would require servicers to provide modified periodic statements to consumers who have filed for bankruptcy.
(7th Cir. Apr. 14, 2016)
The Seventh Circuit applies Wisconsin state law and holds that a mortgage can attach a lien to a vendor’s interest in a real estate contract and that the lender perfected the lien by recording in the county land records rather than filing a UCC-1 financing statement. The trustee is unable to avoid the lien. Opinion below.
Judge: Hamilton
Attorneys for Trustee: Michael F. Dubis, Christopher R. Schultz
Attorneys for Appellees: Ruffi Law Offices, Sara Lynn Ruffi, Lund Law Office, Brad M. Lund
IRS Clarifies That a Typical “Bad Boy Guarantee” Will Not Cause an Otherwise Nonrecourse Financing to Be Treated as Recourse
On April 15, 2016, the IRS released a generic legal advice memorandum (the “GLAM”)1 providing an important and helpful clarification of the treatment of a guarantee of a partnership nonrecourse liability when the guarantee is conditioned on certain typical “nonrecourse carve-out” events (commonly referred to as “bad boy guarantees”).
Do you serve on your condominium’s board as a fun way to meet your neighbors and test out your governance skills? What seems like a low-commitment diversion can balloon into a stressful time suck – or worse. You may be held personally liable for breaching fiduciary duties to your condo. And if you fall into really bad luck and end up in bankruptcy, you may not even be able to discharge debts for such liability, as a recent Fifth Circuit decision reminds us.
Bankruptcies in the retail space are prevalent these days. Some of the more recent and prominent bankruptcies are Pacific Sunwear, Sports Authority, American Apparel and RadioShack. Even if you do not have a lease with a “big box” retailer, plenty of smaller retailers are in distress as well. For Landlords, what do you do if one of your tenants files Chapter 11?
Let’s start with what not to do.
The IRS issued a Memorandum on April 15, 2016 clarifying the treatment of nonrecourse debt subject to certain “bad boy” guarantees. The Memorandum takes a position contrary to the recent Chief Counsel Advice (CCA 201606027) and is more in keeping with the general view of the real estate industry.
For secured lenders, a consumer debtor’s chapter 13 bankruptcy filing can be a mixed bag.
Landlords contemplating terminating a lease with a distressed tenant in advance of a possible tenant bankruptcy will want to consider carefully a recent decision from the Seventh Circuit. The decision, In re Great Lakes Quick Lube LP, reversed and remanded a bankruptcy court decision in favor of a landlord.
Residential Communities: Calderon Process for HOAs Likely to Be Extended Again
Practitioners generally identify “excusable neglect” as the standard that bankruptcy courts apply in determining whether to allow a creditor’s untimely proof of claim. A creditor who lets the bar date pass finds itself in the undesirable position of having to persuade the bankruptcy court that its neglect to file a timely proof of claim was excusable.