CentsAbility: Creditors' Rights Law Update
The Fourth Circuit has held that in a case where the rate of interest on a residential mortgage loan had been increased upon default, a Chapter 13 Plan proposing to “cure” default under 11 U.S.C. §1322(b) is an impermissible modification barred by §1322(b)(2).
Adding to the unsettled body of case law on the enforceability of prepetition waivers of the automatic stay, on April 27, 2016, the U.S.
There are many tenants that are, shall we say, “problem children.” They pay late, open late, breach, junk up your strip or building, threaten, the works. Sometimes, the landlord finds it easier just to reach a lease termination agreement with such a tenant, with the parties walking away with a mutual release. If the lease is below market, or the landlord is really motivated to move this tenant along, the landlord even provides some “keys money” to terminate the lease.
The U.S. Court of Appeals for the Fourth Circuit recently affirmed the dismissal of a borrower’s lawsuit against a bank, holding that the district court correctly found that sale orders entered in a prior bankruptcy case were res judicata and precluded the borrower’s new claims.
A copy of the opinion is available at: Link to Opinion.
(6th Cir. B.A.P. Apr. 26, 2016)
Recently in the Abengoa SA bankruptcy proceeding (click here to review prior post), the United States Bankruptcy Court for the District of Delaware entered an order permitting Debtors to reject certain nonresidential real property leases (the “Rejection Order”).
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”).