Rise seen in retailer bankruptcy; commercial tenant's Chapter 11 filing can be a new lease on life, but it forces landlord to react

Article Abstract:

Increased retailer bankruptcies create legal issues for landlords whose lessees operate under protection. Courts have split on many of the relevant issues, such as whether landlords are entitled to automatic priority for rent between filing for bankruptcy and rejection of the lease, and whether rejection occurs on filing of the order or notice to the lessor. Debtors must assume or reject leases within 60 days of commencing bankruptcy, though courts routinely grant extensions for a variety of reasons.

Retail Stores, Cases, Finance, Retail industry, Retail trade, Commercial leases, Landlord and tenant, Landlord-tenant relations

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Although the Supreme Court tried to clarify how to value secured claims when bankruptcy 'cram down' provisions are invoked, the standards remain unclear

Article Abstract:

Questions remain regarding the valuation of secured creditors' claims under cram down Bankruptcy Code provisions, despite the US Supreme Court's 1997 decision in the Rash case which advocated a replacement-value standard. That decision was an attempt to reconcile the differences in computing value used by various circuit courts. Bankruptcy courts can make valuation decisions based on case facts, according the opinion in Rash.

Laws, regulations and rules, Secured transactions

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As the Bankruptcy Review Commission completes its work, consensus on reform has emerged in many areas, except consumer bankruptcies

Article Abstract:

The National Bankruptcy Review Commission will submit its report to Congress in Oct 1997. Procedural reforms including a new bankruptcy appellate process and a uniform federal exemption system are part of the package of proposed reforms. The handling of Chapter 11 cases will be significantly reformed although the least consensus coalesced on this subject and that of consumer bankruptcy generally.

Innovations, Conflict of laws, Bankruptcy

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