Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
Fourth Circuit Affirms Chapter 11 Dismissal
The Fourth Circuit, on June 15, 2007, affirmed the dismissal of a Chapter 11 reorganization petition filed by a tenant debtor in a commercial lease dispute. Maryland Port Administration v. Premier Automotive Services, Incorporated (In re Premier Automotive Services, Incorporated), ___ F.3d ___, 2007 WL 1721951 (4th Cir. 6/15/07). As the Court of Appeals explained, the tenant had filed its Chapter 11 petition 'in order to forestall eviction on an obviously expired lease ' to prevent the [lessor] from evicting the debtor from the [lessor's] property,' seeking to tie up the landlord 'in endless, fruitless litigation.' Id., at *1. According to the court, the Chapter 11 filing here 'demonstrate[s], unfortunately, how the good and useful ends of the bankruptcy process can be badly abused.' Id.
The Federal Courts' Growing Skepticism to Litigious Commercial Tenants
Federal courts have increasingly rejected extortionate litigation by commercial tenants in the bankruptcy context. In re Integrated Telecom Express, Inc., 384 F.3d 108 (3d Cir. 2004) (held, solvent debtor tenant filed Chapter 11 petition in bad faith; had no present need for bankruptcy relief; could not use Chapter 11 solely to cap commercial lessor's lease rejection damages); In re Liberate Technologies, Inc., 314 B.R. 206 (Bankr. N.D. Cal. 2004) (same; debtor had cash well in excess of liabilities). But see In re PPI Ent. (U.S.) Inc., 324 F. 3d 197 (3d Cir. 2003) (held, no cause for dismissal when insolvent debtor filed Chapter 11 petition to cap landlord's damage claim); Fields Station LLC v. Capitol Food Corp. of Fields Corner (In re Capitol Food Corp. of Fields Corner), ___ F.3d ___ 2007 WL 1616646, *3-5 (1st Cir. 6/6/07) held, because lessor failed to make 'prima facie showing' of bad faith filing, 'bankruptcy court did not abuse its discretion in denying ' motion to dismiss the Chapter 11 petition ” despite debtor's solvency, it was financially troubled; had been 'deprived of its principal source of cash flow'; 'non-monetary default' under lease 'threatened to extinguish its lucrative leasehold'; debtor 'had a present need for Chapter 11 protection to avoid business disruption and economic dismemberment.'; debtor's operation 'restored a reliable and adequate cash flow [to] pay its past and ongoing debts to unsecured creditors [and] continue its timely rental payments' to the lessor.).
This premium content is locked for Entertainment Law & Finance subscribers only
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN ENTERTAINMENT LAW.
- Stay current on the latest information, rulings, regulations, and trends
- Includes practical, must-have information on copyrights, royalties, AI, and more
- Tap into expert guidance from top entertainment lawyers and experts
Already a have an account? Sign In Now Log In Now
For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473
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 Stranger to the Deed Rule
In 1987, a unanimous Court of Appeals reaffirmed the vitality of the "stranger to the deed" rule, which holds that if a grantor executes a deed to a grantee purporting to create an easement in a third party, the easement is invalid. Daniello v. Wagner, decided by the Second Department on November 29th, makes it clear that not all grantors (or their lawyers) have received the Court of Appeals' message, suggesting that the rule needs re-examination.