In the Spotlight: Limiting the Impact of Co-Tenancy Requirements
April 26, 2007
A co-tenancy requirement may have substantial negative effects, including a domino effect if more than one tenant ceases to operate. Most landlords resist giving such rights to a tenant, especially an in-line tenant. However, if an important tenant has sufficient negotiating leverage, a landlord may be forced to roll the dice, agree to a co-tenancy requirement, and hope that the designated co-tenant will continue to operate during the term of the benefited tenant's lease. This article focuses on ways a landlord can limit the impact of co-tenancy requirements.
Balance Sheet Management for Corporate Lessees
April 26, 2007
Operating leases are becoming increasingly important to many corporate lessees for a variety of reasons. The primary reason a corporate lessee prefers operating leases to capital leases is for balance sheet management reasons. Operating leases, or 'true leases' — as opposed to capital leases — reduce the lessee's outstanding debt recorded on the balance sheet, which results in a better debt-to-equity ratio. The other motivations behind the corporate lessee's preference for operating lease treatment vary. For example, many corporate credit facilities have covenants preventing corporations from creating debt, which usually includes capital leases. Also, many companies want to preserve current lines of credit and cash for other ventures, such as the acquisition of a new business line.
Landlord & Tenant
March 27, 2007
Recent rulings of importance to you and your practice.
In the Marketplace
March 27, 2007
Highlights of the latest equipment leasing news from around the country.
Bankruptcy Court Decides When Trade Vendor Priority Claims Get Paid
March 27, 2007
The U.S. Bankruptcy Court for the Eastern District of Pennsylvania recently issued one of the first decisions in the Third U.S. Circuit Court of Appeals to interpret '503(b)(9), an important new Bankruptcy Code provision passed under the Bankruptcy Abuse Prevention and Consumer Protection Act: <i>In re Bookbinders' Restaurant Inc.</i> '503(b)(9) is certain to impact the relationship between a debtor seeking to reorganize and the trade vendors that deal with it.
Information Security Obligations
March 27, 2007
This article outlines the requirements for providing notification of a security breach under state security breach notification laws by any company and the factors that a public company needs to take into account regarding whether to disclose a security breach under federal securities law.
Illegal Use of Equipment
March 27, 2007
A Florida intermediate-level appellate court has held that a lessee is not relieved of its payment obligations when it discovers that it cannot lawfully utilize the leased equipment in the manner it intended. <i>De Lage Landen Financial Services, Inc. v Cricket's Termite Control, Inc.</i> While the writer is aware of similar results reached in other unreported Florida actions, this decision, the first reported decision in Florida, not only will provide assistance in dealing with similar scenarios but also exhibits the strength of standard lease clauses.
Vicarious Liability of Aircraft Owners and Lessors: A Chink in the Armor?
March 27, 2007
In 2005, the Superior Court of Rhode Island held that '44112 of Title 49 of the U.S. Code did not protect the owner and lessor of an aircraft from vicarious liability for negligence of a lessee of the aircraft. <i>Coleman v. Windham Aviation Inc.</i> In light of the decision in Windham (and others discussed below), owners, lessors, of aircraft must be aware of the possibility that a state court may very well impose vicarious liability.
The Leasing Hotline
March 27, 2007
Highlights of the latest commercial leasing cases from around the country.
