In The Marketplace
August 01, 2003
Highlights of the latest equipment leasing news from around the country.
Selected Issues in Domestic Tax-Exempt Leasing Transactions
August 01, 2003
Lease investors have been participating in cross-border transactions for a wide variety of municipal facilities for several years. Assets have included water and sewer systems, electric and gas distribution systems, rail rolling stock and infrastructure, and convention centers. Investors have also been participating in transactions involving U.S. state and local government entities for several years. However, the preponderance of the U.S. transactions closed to date have involved rolling stock or transit facilities.
A Tale of Two Cases: Mobile Goods Require Uniformity of State Statutes
August 01, 2003
Nationwide uniformity of commercial laws has always been a fundamental goal of the drafters of Article 9 of the Uniform Commercial Code. One area, though, that has continually eluded standardization is perfection of liens on mobile goods. Financiers of mobile goods, including vehicles, vessels, trailer homes and modular offices, must grapple with arcane certificate of title statutes that vary widely from state to state. Other state statutes that regulate title and lien interests in mobile goods can become a trap for the unwary. The nature of mobile goods makes uniformity among state statutes a compelling issue for financiers.
Debtor May Assume License as Executory Contract Despite Anti-Assignment Language
August 01, 2003
In a recent decision of interest to the leasing community, the U.S. District Court of Maryland has held that a Chapter 11 debtor could assume a software license agreement (SLA), as an executory contract, although the agreement contained a clause that the debtor could not "assume or assign" the agreement, and even though the assignability of the SLA was clearly precluded by federal copyright law.
The Leasing Hotline
August 01, 2003
Highlights of the latest commercial leasing cases from around the country.
Five Deadly Sins: Lease Clauses a Landlord Should Refuse to Negotiate Under Any Circumstances
August 01, 2003
When a landlord or its attorney prepares an initial draft of a lease on the landlord's form, it is expected that the tenant will simply sign the lease (but only if the tenant believes it has no leverage whatsoever), return the lease with handwritten comments, or, if the tenant's comments are extensive and it has taken control of the drafting process, return a black-lined copy of the lease that it has revised.
A Primer on Anti-Terrorism Requirements in Leasing Transactions: Complying with Executive Order 13224
August 01, 2003
Shortly after September 11, 2001, President Bush issued Executive Order 13224 (the "Order") to combat terrorism. The title of the Order, "Blocking Property and Prohibiting Transactions with Persons who Commit, Threaten to Commit, or Support Terrorism" aptly describes the protective measures contemplated by the Order. Among other things, the Order applies to all real estate transactions, including commercial leases. All owners, tenants, guarantors and other parties to lease transactions, as well as their respective agents and affiliates, are obliged to comply with this Order. Given the critically important national interest at stake, as well as the stern penalties that can be encountered for noncompliance, it is essential for all parties involved in real estate transactions to be aware of the Order's requirements and to include compliance measures in all dealings.
In the Spotlight: Landlords Should Not Overlook the Importance of Estoppel Certificate Provisions
August 01, 2003
Estoppel Certificate Provisions are usually given little, if any, attention during lease negotiations.As long as a lease contains basic language requiring a tenant to provide an estoppel certificate from time to time, most parties to a lease negotiation simply gloss over the provision and move on to weightier issues. In certain situations, particularly where a tenant is the major, if not the only, tenant of a particular real estate project, a landlord seeking to sell or refinance its asset needs to be in the position of requiring the tenant to timely deliver an estoppel that will pass muster with its lender or purchaser (and such purchaser's lender).
Debtor Has Right to File Bankruptcy to Limit Landlord's Claims
August 01, 2003
One of the fundamental policies of the Bankruptcy Code is to provide an equal distribution to all creditors of a debtor's estate. There are a variety of tools under the Bankruptcy Code to accomplish these goals. One such power is the statutory limitation of a landlord's rejection damage claim under section 502(b)(6).
