Refining the law on assignment of rents
Article Abstract:
The 2d US Circuit Court of Appeals affirmed the district court's ruling in In re Vienna Park Properties on Sep 29, 1992. The case concerned the bankruptcy law issues of classification and collectability of a lender's perfected assignment of leases and rents under Bankruptcy Code Section 363. The court ruled that although the rents were cash collateral as of the bankruptcy petition date, the secured creditors could not collect them without further Chapter 11 proceedings since they had not fulfilled the legal requirements to enforce their security interest before the bankruptcy petition took place.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1992
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Assignments: unresolved issues remain
Article Abstract:
The federal court in In re Vienna Park Properties differentiated when a lender has perfected an assignment of leases and rents from when such an assignment is enforced, but it left important issues unresolved. These include whether lenders are allowed to collect rents directly after moving for that right and whether the lender has the right to protection of his interest in the rents after the date of filing or after the filing of a motion to that effect. The court's finding that the rents constituted cash collateral suggests that protection starts with the filing date.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1992
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Assignments of leases and rents at issue
Article Abstract:
The US District Court held, in In re Vienna Park Properties, that perfection of an assignment of leases and rents occurs when the assignment is recorded, making assigned rents cash collateral according to section 363 of the Bankruptcy Code. The court's ruling clears up the confusion regarding the lenders' rights to enforce liens and the protection of debtors under the Bankruptcy Code by better defining when assignments occur.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1992
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