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A circuit split. State vs. estate. Textualism vs. pragmatism. Despite its promise, this year's Supreme Court Bankruptcy Code interpretation bout- Florida Dept. of Revenue v. Piccadilly Cafeterias Inc., 128 S.Ct. 2326 (2008)- was relatively dull. Pragmatism entered the ring disoriented and nervous, and was quickly k.o.'ed by textualism and the certainty of taxes.
In the past, a chapter 11 debtor's counsel might have opted to take advantage of a sale of assets under §363 of the Bankruptcy Code to avoid the delays and uncertainties of the plan confirmation process. On June 16, 2008, the U.S. Supreme Court in Florida Dept. of Revenue v. Piccadilly Cafeterias Inc. held that if a chapter 11 debtor wanted to sell property free of transfer taxes, it had to sell its assets under a confirmed plan and not merely in a §363 sale in contemplation of a plan. ___U.S.___, 128 S.Ct.
For many businesses that operate in shopping centers, industrial complexes, office buildings or other leased property, nonresidential real property leases are often among the “crown jewels” of the company’s assets. Likewise, of critical importance to the owners and management agents of commercial real estate are the securing and maintaining of profitable, long-term, quality tenants and the shedding of tenants whose financial health has declined or who otherwise no longer fit with the lessor’s current or long-term plans for the real estate in question.
In Kelo vs City of New London,[1] the Supreme Court, by the barest of majorities, upheld the constitutionality of a condemnation of private property for the purpose of conveying it to another private party, as part of a development plan that would create jobs, increase the tax base and revitalize an economically distressed city.
