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Recent decisions of interest to you and your practice.
Highlights of the latest cases that affect your practice.
Is it safe to put your reputation in the hands of a reporter you do not know and have no reason to trust? Yes, but only if you follow the rules. Whether you are on the debtor or creditor side, following the rules will have you quoted often in the media, because reporters will know you are a good source for their bankruptcy-related stories.
Features
A truism of bankruptcy is that assets available to pay creditors are few and far between. Among them are causes of action, and thus both debtors and trustees rightly hoard the right to sue third parties. Does the debtor or trustee have standing to sue when the entity brought the harm upon itself? Generally, the answer is no, and thus in this present environment of corporate misdeeds and scandals, litigation against outsiders is foreclosed by the debtor's own misfeasance.
Features
Last month, we discussed the fact that Chapter 11 cases can last for months or years after plan confirmation solely as a result of unresolved disputed claims. To address the speedy resolution of such claims, debtors have increasingly turned to mandatory "alternative dispute resolution" (ADR). We discussed the utilization of voluntary ADR by bankruptcy courts, and the implementation of ADR procedures. This month, we discuss The Sixth Circuit's Decision in Spierer v. Federated Department Stores, et al. (In re Federated Department Stores), 328 F. 3d 829 (6th Cir. 2003) (hereinafter, "Federated"), wherein the Sixth Circuit affirmed the power of the bankruptcy courts to implement mandatory ADR procedures
Features
For many years, the holder of a stock redemption claim against a company in bankruptcy faced almost certain demotion to the class of interest holders. No matter how long ago the stock redemption occurred, no matter the solvency of the company, and no matter how innocent the holder appeared, any claim for unpaid installments due under a stock redemption agreement was sent to the back of the line. In 1996, the Supreme Court issued a decision that rekindled hope for stock redemption claimants; recent case law, unfortunately, has failed to maintain a uniform front on this issue.
In today's competitive commercial real estate market, landlords and tenants spend much time and effort to structure lease transactions to add value to their respective portfolios. They each factor into their economic analysis relevant concerns such as rent, construction costs, construction build-out periods, operating expenses and revenue forecasts. An additional factor that should be considered in this process is the cost incurred by both parties to administer the lease obligations during the lease term for ongoing maintenance, repair and replacement items.
Recently, the Court of Special Appeals of Maryland held that a letter of intent was binding on the parties. <i>Windsor Development, L.L.C. v. Clearcomm Technologies, Inc., No. 999 (Md.App. filed Aug. 5, 2002).</i> The court granted a summary judgment motion enforcing the provisions of the letter of intent relying on the "plain and unambiguous" language.
Features
Highlights of the latest commercial leasing cases from around the country.
Security deposits are an age-old form of security for the performance of the tenant's obligations under a lease. In the simplest of transactions, the tenant deposits a fund with the landlord to be used to protect the landlord against the economic consequences of a tenant's default. The amount of the fund is the product of negotiations and usually involves a multiple of the monthly rent payable under the lease. In more sophisticated commercial transactions with other than the most creditworthy of tenants, the landlord wants the tenant to deposit a substantial sum, perhaps a multiple of the yearly rent payable under the lease, especially if the landlord pays for substantial tenant improvements. <p><i>Part Two of a Two-Part Series</i>