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Insolvency

90 Second Lesson default

90-Second Lesson: You Default on a Commercial Loan, What Happens Next?

QUESTION: Scott T,  emailed, asking, “I have a client who owns a few income-producing properties, and she thinks she may not be able to make her next mortgage payments to her lender. What should I tell her to expect?” ANSWER: Once a default on a commercial loan is looming or occurs, a proactive mortgage lender […]


Do I Get the Land?

When a Seller of Real Property Files for Bankruptcy Before Closing

Purchaser’s Rights Under an Executory Contract Sven, of St. Paul related this sad but musical tale to us, which pertains to purchasing real estate where the seller files for bankruptcy before closing: You see, she and I entered into a written contract to buy a piece of land near St. Paul with a small house […]


What to Consider When Selling a Bankruptcy Claim

What to Consider When Selling a Bankruptcy Claim

Why Sell a Bankruptcy Claim? Imagine this: One of your customers sends you a notice stating it has filed for chapter 7 or chapter 11 bankruptcy protection rather than the payment for goods or services provided that you were expecting. In technical terms, you now have a “claim” against the “debtor,” but you aren’t sure […]


Commercial Real Estate Tenant Bankruptcy — What to Do

Commercial Real Estate Tenant Bankruptcy — What To Do

When a commercial real estate tenant files a chapter 11 bankruptcy case, the landlord faces unfamiliar issues. Although each case is unique, this article provides a basic overview of the issues commercial landlords could run into.


Assess 3 Potential Preference Action Defenses

Assess 3 Potential Preference Action Defenses

These 3 preference action defenses options involve a detailed analysis of historical business interactions and utilization of records to support your transactions.


The A&P Chapter 22 Bankruptcy Saga A Canary in the Coal Mine

The “A&P” Chapter 22 Bankruptcy Saga: A Canary in the Coal Mine

On July 20, 2015, the Great Atlantic & Pacific Tea Company, made history by filing what we in the restructuring industry like to call “Chapter 22 Bankruptcy.” Read more to see how this case unfolded and what it means for struggling grocers and retail stores.


There Ought to Be a Law, and There Is: When the Insolvent LLC’s Manager Distributes Cash But Does Not Pay Creditors

The borrower is an LLC managed by a greedy principal member. The borrower slowly pays the secured creditor and unsecured creditors over years and its business becomes insolvent. The insolvent LLC makes cash distributions to its members, but not to the secured creditors. Is there a law against this sort of behavior?


A chess pawn topples another one, symbolizing the replacing of a debtor's management with a chapter 11 trustee

The Good, the Bad, and the Ugly of Replacing a Debtor’s Management with a Chapter 11 Trustee

A creditor may seek appointment of a chapter 11 trustee in replacement of the debtor in possession, but there are special considerations to make first.


90 Second Lessons: Nothing in Life is Certain but Death and Taxes: Cancellation of Debt Income

Editor’s Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to [email protected] and we will try to answer it. Question Robin T. wrote in asking, I own a small retail chain that has been struggling. I hired a lawyer to negotiate with my creditors, and […]


Solvent Debtor Chapter 11 Bankruptcy

Solvent Debtor? A Chapter 11 Debtor Need Not Be Broke

A Solvent Debtor Can File for Bankruptcy…but Can They Survive a Motion for Dismissal? Suppose that your borrower or customer files for chapter 11 bankruptcy. You do not like this, because you’ll almost certainly not collect the full amount owed to you. In fact, to get anything at all, you’ll have to get involved with […]


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