Bankruptcy valuation of a claim secured by a mortgage on realty and an assignment of rents
Article Abstract:
Bankruptcy courts and federal district courts disagree on how to treat the assignment of rents in bankruptcy. One issue that remains unresolved despite several published opinions on the matter is the determination of the amount of secured and unsecured portions of a claim secured by realty and by the rents from the realty. The applicable statutes are Sections 506(a) and 552(b)(2) of the Bankruptcy Code. Reading these sections together, the secured claims would contain both the realty's value and the rents. Despite the statutory language, several courts have, however, declined to add the rents to the value of the realty in figuring out the amount of the secured claim under Section 506(a). The courts continue debate on the issue and an ultimate resolution may have to come from the US Supreme Court.
Publication Name: Commercial Law Journal
Subject: Law
ISSN: 0010-3055
Year: 1996
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The oversecured creditor's right to enforce a prepayment charge as part of its secured claim under 11 U.S.C. section 506(b)
Article Abstract:
The ability of secured creditors to bypass debt acceleration requirements, appeals of stays of execution or other bankruptcy court procedures required to file claims against debtors and hold debtors liable under prepayment clauses in promissory notes is unsettled. What is clear is that prepayment contractual clauses will be unenforceable by federal bankruptcy courts if they compensate debtors beyond actual losses and function as punitive damage awards for breach of the prepayment agreement. Creditor's measure of damages should be the difference between interest rates accruing at the breached prepayment date and the payment rate provided for in the contract.
Publication Name: Commercial Law Journal
Subject: Law
ISSN: 0010-3055
Year: 1993
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Liability of a secured party in possession when pledged stock or similar securities decline in value
Article Abstract:
Section 9-207 of the Uniform Commercial Code has been given conflicting interpretations for the liability of secured parties when pledged securities decline in value. Review of many cases indicates that litigation will continue as general principles develop. Issues include reasonable care, duty to preserve value, limitation of duty to physical care, control exception, management exception and commercial reasonableness.
Publication Name: Uniform Commercial Code Law Journal
Subject: Law
ISSN: 0041-672X
Year: 1993
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