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Bankruptcy trustees are armed with several familiar tools to recover assets for the benefit of the bankruptcy estate. One commonly used tool is state law avoidance powers, which is granted to trustees by § 544(b). However, trustees (and their attorneys) should be aware that § 548 provides an additional, independent cause of action to avoid transfers. The importance of this additional federal remedy was illustrated recently in the Northern District of Iowa.
Section 522(b)(3)(A) of the Bankruptcy Code generally permits a debtor to claim exemptions under the state or local law applicable on the date of the filing of the petition.[1] Which state or local exemption scheme applies is determined by a debtor’s domicile during the 730 days immediately preceding the petition date, but what happens if you live in two places?
The collapse of a commercial construction project may result in reorganization or liquidation through an insolvency proceeding overseen by a bankruptcy trustee or receiver. As part of the wind-down process, following the liquidation of assets the fiduciary has an obligation to equitably distribute any remaining and recovered assets to the estate’s creditors. Consequently, in order to properly allocate the assets, the fiduciary has a duty to analyze all creditor claims, including statutory lien claims.
A recent opinion issued by the Ninth Circuit Court of Appeals in the case of Pinnacle Restaurant at Big Sky LLC v. CH SP Acquisitions LLC( In re Spanish Peaks Holdings II LLC)[1] affirmed a holding that would allow, under certain circumstances, the sale of commercial real estate in a bankruptcy case to be free and clear of all liens, claims and encumbrances, including leasehold interests that are generally protected under § 365(h) of the Bankruptcy Code.
Three men had a vision to develop a sports complex in Middleton, Del. They formed a limited liability company called, fittingly, Delaware Sports Complex LLC (hereinafter “DSC”)[1].
DSC was eager to develop its 170-acre sports complex — perhaps too eager, because it entered into a lease one (1) year before the LLC had been legally created. However, the lease contained a term wherein DSC represented and warranted that it was a duly formed and created Delaware LLC.
In the recent case of In re Oakes,[1] the chapter 7 trustee filed an adversary complaint seeking to avoid PNC Mortgage Company’s mortgage on real property owned by the debtors because of a defective acknowledgment of the debtors’ signatures. No one denied that the mortgage was defective or that there was precedent to avoid a mortgage containing a “blank” acknowledgment clause under § 544(a) and Ohio law, but PNC sought to dismiss the avoidance action based on the newly enacted Ohio Rev.
