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Recovering Attorneys' Fees As an Administrative Expense
In counseling clients on whether to structure a transaction as a lease or a loan, there are several financial considerations. The first is the potential that the client's customer could file for bankruptcy, and its impact upon recovering rent payments as a priority administrative expense. In that case, attorneys' fees are a factor as well. The Bankruptcy Code provisions that govern the rights and remedies of an equipment lessor in comparison to the rights and remedies of a secured lender differ significantly ' they may be considered more favorable to an equipment lessor than a secured lender for the reasons discussed later in this article, although certain provisions of the Code that address the remedies of a secured lender are applied to an equipment lessor as well. Section 365(d)(10) of the Bankruptcy Code provides that:
'The trustee shall timely perform all of the obligations of the Debtor, except those specified in Section 365(b)(2), first arising from or after 60 days after the order for relief in a case under Chapter 11 of this title under an unexpired lease of personal property ' until such lease is assumed or rejected notwithstanding section 503(b)(1) of this title, unless the court, after notice and a hearing and based on the equities of the case, orders otherwise with respect to the obligations or timely performance thereof ' '
The language of this statute and its Congressional history have been interpreted and relied upon by bankruptcy courts in many circuits of the country. The courts have used the statute to grant an equipment lessor an automatic administrative expense for unpaid post-petition lease payments where the lessee remains in possession of the leased equipment on or after the 60th day from filing a bankruptcy petition until eventually assuming or rejecting the lease. This expense has been granted without the usual proofs required under Section 503(b)(1)(A) (to show actual, necessary costs of preserving the estate). In re: Furley's Transport, Inc., 263 B.R. 733 (Bankr. D. Md. 2001); In re: Russell Cave Co., 247 B.R. 656, 659 (Bankr. E.D.Ky. 2000); In re: The Elder-Beerman Stores Corp., 201 B.R. 759, 763 (Bankr. S.D. Ohio, 1996); In re: Brennick, 178 B.R. 305, 307 (Bankr. D. Mass. 1995). This extraordinary benefit from 365(d)(10) is not applicable to the first 59 days after the debtor's petition is filed but 503(b)(1)(A) is, according to the majority of courts particularly in cases where the lessee or debtor uses the leased equipment post-petition and gains some benefit from the property. In re: Raymond Cossette Trucking, Inc., 231 B.R. 80 (Bankr. D.N.D. 1999); In re: Thompson, 788 F.2nd 560 (9th Cir. 1986); Kinman & Kinman P'Ship v. Agristor Leasing, 116 B.R. 162 (D. Neb. 1990); In re: Furley's Transport, Inc. 263 B.R. 733, 740-41 (Bankr. D. M. 2001); In re: Muma's Services, Inc., 279 B.R. 478 (Bankr. D. Del 2002).
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.
The Anti-Assignment Override Provisions
UCC Sections 9406(d) and 9408(a) are one of the most powerful, yet least understood, sections of the Uniform Commercial Code. On their face, they appear to override anti-assignment provisions in agreements that would limit the grant of a security interest. But do these sections really work?