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Landlord's Claim Puts Letter of Credit Proceeds at Risk
A recent bankruptcy decision makes clear that it is risky for a landlord to file a proof of claim in a bankruptcy proceeding when the landlord has substantial security in the form of both a security deposit and letter of credit. If a landlord has drawn down the letter of credit proceeds and withdrawn the security deposit in full after the tenant's default, filing a proof of claim in the tenant's subsequent bankruptcy proceeding may invite a bankruptcy court's consideration of whether those funds are or should be assets of the bankruptcy estate.
In 40 CPS Associates, LLC v. Villano Family Limited Partnership, 2015 U.S. Dist. LEXIS 158033 (E.D.N.Y. Nov. 23, 2015), a New York district court dismissed CPS Associates' appeal of an order of the bankruptcy court authorizing a family limited partnership to object to claims it asserted against the estate of the debtor, including its claim for payment of an administrative expense for the debtor's post-petition rent or postpetition use and occupancy of real estate. In this case, CPS Associates, the landlord, drew down a letter of credit issued to ensure payment of rent and also filed a proof of claim in the tenant's bankruptcy.
The Facts
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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.
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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.
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