Single-asset bankruptcy ruling issued; in a debtor-friendly decision, 7th Circuit held that real estate debtors could retain ownership under 'new value corollary.'

Article Abstract:

The United States Court of Appeals for the 7th Circuit In re N. LaSalle Street Partnership supported the new value concept, the basis for the economic rationale of most real estate bankruptcies. The court also rejected many different objections to the confirmation of a reorganization plan, many of which had prevented confirmation in other single-asset bankruptcies. The 7th Circuit has given a series of rules and holdings signaling the probable success of single-asset reorganizations in the Midwest. The decision will be seen as a victor for debtors needing bankruptcy protection.

Taxation, Mortgages, Corporate reorganizations, Nonrecourse debt

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Tenants in bankruptcy find favor in minority rule: most courts uphold landlords' right to full post-petition rent, but a strong minority disagrees

Article Abstract:

The recent decision in In re JAS Enterprises takes a minority position on the protections landlords have for continued rent during a tenant's bankruptcy proceedings. For many years landlords have had a special priority that ensures they receive full, contractual rent payments regardless of the value the tenant derives from the property. The JAS court followed the minority view that the landlord must prove the claim for rent is a necessary expense providing tangible benefit. This view is unlikely to gain support.

Interpretation and construction, Bankruptcy law, Landlord and tenant, Landlord-tenant relations, Rents (Property)

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The Supreme Court granted cert. in '203 North LaSalle Street Partnership,' which should resolve the split over the meaning of the new-value doctrine

Article Abstract:

The US Supreme Court has granted certiorari in In re 203 North La Salle Street Partnership, in which the court will rule for the first time since the adoption of the 1978 Bankruptcy Code whether the "new value" exception to the absolute-priority rule will remain important in bankruptcy law and practice. This doctrine runs counter to the "absolute priority rule," another core value of debtor creditor law.

Priorities of claims and liens, Debtor and creditor

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