DelawareBankruptcyLitigation

What are the landlord’s rights when the tenant assumes and assigns the lease to a third-party?

03/03/15

In conjunction with assuming the lease,  the Bankruptcy Code allows the debtor-tenant to assign the lease to a third party.  The party who is assigned the lease must provide the landlord with adequate assurance that it can meet the financial obligations of the lease.  If the party who is assuming the lease cannot provide the landlord with adequate assurance,  the landlord has cause to object to the assignment.

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Trump Wins Relief From Stay – No More Trump Casino in AC?

02/23/15

In a 21 page opinion (the “Opinion”) released February 20, 2015, in the Trump Entertainment Resorts, Inc bankruptcy (Case No.

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What are the landlord’s rights when the debtor-tenant decides to assume the lease?

02/23/15

Assumption of the lease is permissible even if the terms of the lease expressly prohibit assumption.  Section 365 of the Bankruptcy Code requires a debtor-tenant to meet certain criteria in order to “assume” a lease.  First, and most importantly, the tenant must cure any and all existing defaults, both monetary and non-monetary.  Second, the debtor-tenant must provide “adequate assurance” to the landlord that the debtor will be able to perform under the lease going forward.  The tenant’s obligation to cure defaults includes the payment of late charges or similar charges that arise under the

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Altegrity Formation Meeting and Section 341 Meeting of Creditors Scheduled

02/18/15

In the Altegrity, Inc. bankruptcy proceeding, a formation meeting has been scheduled for Tuesday, February 24, 2015 at 10:30 a.m. (ET) at the Doubletree Hotel, 700 N. King Street, Wilmington, DE 19801.  Click here for a copy of the Notice of Formation Meeting for Official Committee of Unsecured Creditors issued by the Office of the United States Trustee.

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Tales of the GM Bankruptcy: Erroneous UCC-3 Termination Statement Results In Loss of Secured Interest on $1.5 Billion Term Loan

02/17/15

This post was originally published in the American Bar Association Young Lawyer Division Bankruptcy Committee Winter 2015 Newsletter. (c) 2015 by the American Bar Association.

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What are a Landlord’s “Rejection Damages?”

02/16/15

If the debtor-tenant seeks to terminate and surrender the lease, that is “reject it”, the landlord may be entitled to a “rejection damage” claim.  A landlord is not entitled to the full amount of unpaid obligations for the balance of the lease.  Instead, Section 502(b)(6) limits the recovery a landlord may receive for “rejection damages.” Under Section 502(b)(6) of the Bankruptcy Code, the landlord is entitled to rent due under the rejected lease for the greater of (i.) one year’s rent, or

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Preference Actions filed in CPI, Corp.

02/10/15

On February 6, 2015, Charles A. Stanziale, Jr., as the Chapter 7 Trustee (the “Trustee”) of CPI, Corp., et al. (“CPI” or the “Debtors”), filed approximately 44 preference complaints seeking to avoid and recover alleged preferential transfers pursuant to Sections 547 and 550 of the Bankruptcy Code, to disallow claims pursuant to Section 502(d), for attorneys’ fees, and prejudgment interest.

Background

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RadioShack Pulls the Plug

02/08/15

In an unsurprising move, RadioShack has become the latest retailer to file for relief under Chapter 11 of the Bankruptcy Code.  RadioShack filed on February 5, 2015 along with 17 of its affiliates.  The cases are jointly administered under Case Number 15-10197 and presided over by Judge Shannon.  The emergency first day motion was held on February 6, 2015, and a further first day hearing will occur at 9:30 on February 9, 2015.

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What is the Status of a Tenant’s Rental Obligations While Landlord is in Bankruptcy?

02/08/15

Section 365(d) of the Bankruptcy Code requires the debtor-tenant to satisfy all the terms under the lease during the post petition period until the tenant either rejects the lease, or assumes and assigns it to a third-party.  The landlord’s claim for unpaid rent receives “administrative claim” status, which is a higher priority of claim than many of the other claims against the debtor.  Creditors holding an administrative claim against the debtor will receive payment on their clai

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A Default is a Default, no Matter the Size?

02/01/15

In an 11 page opinion issued January 30, 2015 in the TPOP bankruptcy (13-11831), Judge Shannon held that GM did not lose the ability to enforce its contracted right to repayment just because the default was “immaterial” according to the Debtor.  The Opinion is available here.

Background

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