SNDA Basics

A subordination, nondisturbance and attornment agreement (“SNDA”) is commonly used in real estate financing to clarify the rights and obligations between the owner of rental property (i.e., the borrower), the lender that provides financing secured by the property, and the tenant under a lease of the property in the event the lender forecloses or otherwise acquires title to the property. As suggested by its name, an SNDA has the following three primary components:

On February 1st, the Tenth Circuit held that Deutsche Bank failed to establish it was a "party of interest" entitled to relief from a bankruptcy petition's automatic stay. After Deutsche Bank's foreclosure of the Millers' home was stayed by the latter's bankruptcy petition, the bank obtained relief from the stay. On appeal, the Tenth Circuit reversed and remanded. The bank failed to provide the original note to the bankruptcy court and did not provide the original or a copy to the bankruptcy appellate panel.

On June 23rd, the First Circuit addressed the priority of claims asserted by senior noteholders and junior noteholders of debt issued by an insolvent bank. It affirmed the bankruptcy court's finding that the parties did not intend for the senior noteholders to receive post-petition interest payments prior to the junior noteholders receiving a distribution. In re: Bank of New England Corporation, Debtor.  

On November 10th, the International Swaps and Derivatives Association announced that its Americas Credit Derivatives Determinations Committee resolved that a bankruptcy credit event has occurred in respect of Ambac Financial Group, Inc. An auction will be held for Ambac Financial Group for which ISDA will publish the auction terms. ISDA Press Release.  

On April 26th, the Eleventh Circuit held that the anti-injunction provision of the Financial Institutions Reform, Recovery and Enforcement Act prohibits a federal district court from enjoining the FDIC. A trial court had initially imposed a TRO against a failing bank prohibiting it from taking any action with respect to $1 billion worth of mortgage proceeds it held in trust for petitioner, Bank of America, who held legal title. When the FDIC was appointed receiver, the FDIC moved to dissolve the TRO. The trial court refused converting the TRO into a preliminary injunction.

In a recent holding that a creditor may collect, on an unsecured basis, post-petition attorneys’ fees under an otherwise enforceable pre-petition contract, the Second Circuit Court of Appeals followed a similar ruling by the Ninth Circuit earlier this year, adding to a conflict among the circuits on this issue.

The United States Supreme Court (the “Court”) recently issued a long-awaited decision in Czyzewski v. Jevic Holding Corp. (“Jevic”), which limits the use of “structured dismissals” in Chapter 11 bankruptcy cases, requiring structured dismissals pursuant to which final distributions are made to comply with the Bankruptcy Code’s priority scheme, or the consent of all affected parties to be obtained.1

What is a Structured Dismissal?

In Sposato v. First Mariner Bank, 2013 WL 1308582 (D. Md.

On November 4th, the Federal Bankruptcy Court granted the SIPC Trustee's motion to establish procedures for the issuance of subpoenas for document production and depositions in connection with the SIPC Trustee's independent investigation into the business and affairs of MF Global. Access to documents produced by witnesses and attendance at examinations will be limited to the SIPC Trustee and his professionals. The SIPC, SEC and CFTC will have access to the discovery upon the execution of confidentiality agreements.