Commercial Real Estate Bankruptcies and Restructurings
Samuelson Law handles commercial real estate bankruptcies and restructurings. What distinguishes Samuelson Law, from most other bankruptcy law firms, is that Samuelson Law focuses upon the transactional aspects of bankruptcies, rather than just the litigation. The same attorney formulates an overall workout, or plan of reorganization, and the workout agreements, in light of the litigation, and vice versa.
Samuelson Law’s bankruptcy clients are mainly:
- Single asset commercial real estate LLC’s or members thereof
- Commercial real estate lenders and landlords
- “White knights” and other investors in, or purchasers of, distressed commercial real estate, mortgages, or LLC membership interests
- Trying to Avoid Being Characterized as “Single Asset Real Estate”. Subchapter V (of Chapter 11, of the Bankruptcy Code, i.e. the Small Business Reorganization Act) is designed to simplify the Chapter 11 process, to give the debtor greater powers to get a plan of reorganization approved by the Court, and to make the Bankruptcy less expensive. By contrast, the single asset real estate statutes are not debtor-friendly. The CARES Act raises the eligibility limit under Subchapter V to $7,500,000 for a year, but still does not allow “single asset real estate” debtors to take advantage of Subchapter V. That has increased the incentive for otherwise qualified real estate owners to try to find ways to convert themselves from “single asset real estate” debtors into “small business debtors”. See what happens when the mortgagor does not require the debtor to be a special purpose entity: In re: Moore Properties of Person County, LLC, 68 Bankr.Ct.Dec. 123, 2020 WL 995544, Memorandum Order (M.D.N.C., 2/28/2020).
- Unique Issues LLCs and Partnerships Face in Bankruptcy.
- Trying to Avoid Having Loan and Lease Workout Agreements Being Subsequently Clawed-Back as Fraudulent Transfers or Voidable Preferences.
- Foreclosure Defenses; Eviction Defenses; and Cycling Back and Forth Between Foreclosure (or Landlord/Tenant) Court and Bankruptcy Court.
- Can a Title Insurance Policy Protect a Purchaser Against Fraudulent Transfer and Voidable Preference Claims?
- Piercing the Corporate Veil. Managerial control and lack of separate capitalization as key issues.
- Whether Self-Help is a Good Idea, to Evict Commercial Tenants, Pre-Bankruptcy. Self-held, to evict a commercial tenant in default, may be prohibited by statute or be deemed to be a misdemeanor breach of the peace, even where the subject lease allows it. At the least, it risks generating fraudulent transfer and voidable preference challenges and physical retaliation and break-ins.
- Do Secured Lenders Have to Worry about the Debtor’s Attorneys’ Fees?
- Defenses Against Spousal Guaranties.
- Force Majeure Clauses. A heavy focus upon what was once regarded as mere boilerplate. Is foreseeability an implied prerequisite? What’s not foreseeable? Dealing with governmental directives that are not enforceable and labor fears that are not “strikes”. How carve-outs for rents relate to opening deadlines?