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Real Estate Advisor Law Blog

Category Archives: Bankruptcy/Creditor’s Rights Issues

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Fraudulent Transfer Litigation – The Eleventh Circuit Court of Appeals Deals a Blow to Lenders

Posted in Bankruptcy/Creditor's Rights Issues, Conveyancing
 A highly significant ruling involving fraudulent transfers recently decided by the Eleventh Circuit could have a far-reaching impact on distressed lending and investing.   In Senior Transeastern Lenders v. Official Committee of Unsecured Creditors (In re TOUSA, Inc.), 2012 WL 1673901 (11th Cir. May 15, 2012), the Eleventh Circuit Court of Appeals reversed the district court and… Continue Reading

A Receiver’s Authority to Sell Property Free and Clear of Liens and Encumbrances Gaining Momentum in Ohio

Posted in Bankruptcy/Creditor's Rights Issues, Finance Issues
            As the filing of Chapter 11 cases continues to be rare, state court alternatives for liquidation of assets continue to grow in popularity. State court alternatives typically provide a more expeditious and less expensive forum for secured lenders to direct the liquidation of their collateral—for example, state court receivership sales avoid the United States Trustee… Continue Reading

Single Asset Real Estate Chapter 11 Cases – The Sixth Circuit Bankruptcy Appellate Panel Gives a Victory to Undersecured Lenders

Posted in Bankruptcy/Creditor's Rights Issues
A recent case from the Sixth Circuit Bankruptcy Appellate Panel, In re Buttermilk Towne Center, LLC, 2010 Bankr. LEXIS 4563 (BAP 6th Cir. 2010), appears to have strengthened the undersecured lender’s hand in single asset real estate Chapter 11 cases. An undersecured lender is one whose collateral is worth less than the amount the debtor owes,… Continue Reading

Cognovit Update

Posted in Bankruptcy/Creditor's Rights Issues, Finance Issues, Litigation Issues
Ohio is one of the few remaining states that still enforce cognovit provisions in promissory notes and other loan documents. A cognovit provision allows a creditor to take judgment immediately against a borrower upon the borrower’s default without having to endure the time, expense, and risk of a lawsuit. Cognovit provisions are only enforceable in… Continue Reading

Fannie Mae Partners With Cuyahoga County Landbank

Posted in Bankruptcy/Creditor's Rights Issues, Finance Issues, Legislative Update
The Cleveland Plain Dealer has reported that Fannie Mae, a player in the national secondary mortgage market and unwitting owner of numerous abandoned properties in the Greater Cleveland area, has reached a deal with the newly formed Cuyahoga County Land Reutilization Corporation to sell properties to it for $1 each. Compared with our last report… Continue Reading

Losing Priority: The Risk of Noninsider Equitable Subordination

Posted in Bankruptcy/Creditor's Rights Issues, Finance Issues, Litigation Issues
Following an era of relaxed standards for issuing loans, lenders must be aware of a bankruptcy court’s ability to subordinate liens for equitable reasons. On May 13, 2009, in In re Yellowstone Mountain Club, the Bankruptcy Court for the District of Montana issued an order subordinating the secured lender’s $232 million claim below the (i) debtor-in-possession… Continue Reading

Protecting Tenants at Foreclosure

Posted in Bankruptcy/Creditor's Rights Issues, Finance Issues, Legislative Update
The rights of owners and tenants in post-foreclosure property have been dramatically altered by new legislation signed by President Obama. On May 20, 2009, President Obama signed the “Helping Families Save Their Home Act,” which contained provisions to aid renters whose landlords go through foreclosure. Title VII of the Helping Families Act (the “Act”) is entitled “Protecting… Continue Reading

You Did What With My Money?!

Posted in Bankruptcy/Creditor's Rights Issues, Litigation Issues, Tax Issues, Title Insurance
               On November 26, 2008, LandAmerica Financial Group, Inc. (“LandAmerica”) and its affiliate, LandAmerica 1031 Exchange Services, Inc. (“LES”) filed for Chapter 11 protection from creditors.  LES abruptly ceased its 1031 exchange intermediary business two days prior to the bankruptcy filing and LandAmerica sold its Lawyers Title and Commonwealth Title… Continue Reading

A Guide to Dealing with Increased Delinquencies in Condominium and Homeowners’ Associations

Posted in Bankruptcy/Creditor's Rights Issues, Condominiums, Litigation Issues
According to the Community Associations Institute, nearly 60 million people across the country live in association-governed communities. Many of these communities have been severely affected by the current economic downturn and increase in foreclosure rates. In a condominium or homeowners’ association, delinquencies and foreclosures create a ripple effect that impacts all owners. Once an owner ceases paying… Continue Reading

Bankruptcy Court Refuses to Modify Interest Rate on Ohio Tax Certificates

Posted in Bankruptcy/Creditor's Rights Issues, Tax Issues
In In re Cortner, decided February 4, 2009, the Bankruptcy Court for the Southern District of Ohio held that an Ohio property tax certificate holder was entitled to receive the auction-established rate of interest on its certificate, rather than a reduced, court-determined rate. The creditor held several tax certificates, purchased at auction as described in the… Continue Reading

Policing Leasing

Posted in Bankruptcy/Creditor's Rights Issues, Leasing Issues
 It seems like every day another retailer files bankruptcy.  Many more have frozen new deals, cancelled scheduled openings and even closed open stores. A shopping center landlord must monitor tenant monthly gross sales reports and tenant public filings to anticipate which of its tenants are or could become problem tenants. The landlord should also act quickly to… Continue Reading
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