Bankruptcy Finance & Banking Construction

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Seventh Circuit Limits Construction Lender’s Use of Title Insurance Policy to Cover Construction Liens Created by Lender’s Cutoff...

In a recent decision written by Judge Sykes, affirming a decision from the Western District of Wisconsin, in an issue governed by Wisconsin law, the Seventh Circuit ruled that a title insurer has no duty to indemnify a...more

Seventh Circuit Says Violations of Wisconsin’s Theft-by-Contractor Statute Are Not Dischargeable in Bankruptcy

The Bankruptcy Code prevents an individual debtor from discharging certain debts, including, upon request of the creditor, debts for “fraud or defalcation while acting in a fiduciary capacity.” 11 U.S.C. § 523(a)(4). The...more

Asset-Light

While asset-light strategies have been utilized for decades in the hotel industry, the strategy and how to implement it are a bit more complicated in the development space, whether for a hotel or time-share company. A typical...more

OAS UPDATE: Bankruptcy Court Grants Limited Temporary Relief in Chapter 15 Case

Background: Grupo OAS, a Brazilian construction conglomerate linked to a massive corruption scandal (“OAS”), filed for Chapter 15 creditor protection in the Bankruptcy Court for the Southern District of New York on April 15,...more

Illinois Court Holds that Engineering Plat Did Not Improve Land, Rendering Mechanics Lien Invalid

The Illinois Appellate Court invalidated an engineering firm’s mechanics lien for platting of undeveloped land performed as due diligence before a sale, because the services provided by the firm did not increase or improve...more

Nevada Supreme Court Addresses Private Sale Through Receivership

In U.S. Bank, N.A. v. Palmilla Development, Co., Inc., the Nevada Supreme Court recently confirmed that a receiver’s sale is a form of foreclosure sale that triggers a secured party’s right to a deficiency judgment. This...more

Surety Bonds: Direct Claims v Derivative Claims – Who Knew?

New Bern Riverfront Dev., LLC v Weaver Cooke Constr., LLC (In re New Bern Riverfront Dev. LLC), 521 B.R. 718 (Bankr. E.D.N.C. 2014) – The debtor made claims against a surety that issued a performance bond in connection with a...more

Oil and Gas Restructurings: Exploration and Production Companies Face Unique Issues

The recent drop in oil prices will likely spur a flurry of industry restructurings, governed by a complex set of bankruptcy and state laws. Introduction - At the close of business on December 31, 2014, the...more

Equitable Subordination: Construction Lenders Beware

Atlantic Builders Group, Inc. v. Old Line Bank (In re Prince Frederick Inv., LLC), 516 B.R. 778 (Bankr. D. Md. 2014) – A construction contractor contended that the claim of the debtor’s construction lender should be...more

December 2014 - Real Estate FOUNDATION

In this issue - The CERCLA Divisibilty Defense: Back from the Dead? - Springing Recourse for Breach of Solvency and Debt Payment Covenants? Does New York Need Cherryland Legislation? - Mid-Construction...more

Low-income housing tax credit workouts and bankruptcies: Understanding the basics

Note: This post is the first in a continuing series on the Credit Report Blog on the subject of workouts and bankruptcies involving low-income housing tax credit (LIHTC) projects....more

Bankruptcy by the Developer/Owner: Mechanics Lien Rights May Still Prevail!

The rate of bankruptcies among construction industry participants is higher than some think. The bankruptcy of a developer creates an “automatic stay” under federal law preventing almost all collection activities, including...more

Nevada Supreme Court Clarifies Mechanic and Materialman Lien Issues

On August 7, 2014, the Nevada Supreme Court issued two opinions dealing with the priority of mechanics’ liens and the proof required for a materialman to establish a lien. These cases provide valuable guidance to lenders,...more

Fourth Circuit Reestablishes Subcontractors’ Right to Perfect Liens After Bankruptcy Filing

The Fourth Circuit Court of Appeals recently ruled in the case of In re Construction Supervision Services that the property interest underlying a subcontractor’s lien on funds arises from the date it first furnishes labor or...more

Mechanics Lien Rights: Use ‘Em or Lose ‘Em

An important new case regarding New Hampshire Mechanics Lien Law has application for contractors in all states and reminds the industry of how painful uncollectible debts can be. In Moultonborough Hotel Group decided on July...more

Contractors And Suppliers’ Defenses To Bankruptcy Preference Claims

Bankruptcy preference claims are always an unpleasant surprise. ...more

Mississippi District Court Defers to New York Court in Bond Action

The United States District Court for the Northern District of Mississippi denied the motion of defendant ACA Financial Guaranty Corporation (ACA) to dismiss a class action complaint, finding that the issues were previously...more

Insolvency in the Building and Construction Industry: Proposed Amendments to the Building and Construction Industry Security of...

The Industry and Current Legislation - The NSW building and construction industry (the Industry) is plagued by a high level of insolvencies. In the 2012 financial year, almost 25% of the external administrations...more

Commercial Restructuring & Bankruptcy Alert - June 2012

In this issue: - Construction Lenders Beware - Supreme Court Upholds Secured Creditor’s Right to Credit Bid in a Bankruptcy Case - Jointly Administered Plans Must Obtain Impaired Class Approval ‘Per Debtor’...more

Subcontractors Take Note - Appellate Division Confirms That Construction Lender Has No Duty To Subcontractor Absent Express...

The New Jersey Appellate Division recently ruled in Vollers Excavating and Construction, Inc. v. Citizens Bank of Pennsylvania, Docket No. A-3844-10T1 (March 5, 2012), that a construction lender has no obligation to pay an...more

How To Minimize Construction Default Consequences

The abandoned construction project can present a nightmare for a property owner. This article details precautions an owner can take pre-construction to minimize the consequences of a failed project....more

Rainbow 215, LLC Chapter 11

Appropriate Rate of Interest in a Cramdown--Judge's Confirmation of Plan of Reorganization of a Single-Asset Real Estate Developer

"APPROPRIATE RATE OF INTEREST" FOR A CHAPTER 11 CRAM-DOWN & THE SUPREME COURT’S "TILL" DECISION According to the Bankruptcy Code, a confirmable Plan of Reorganization must provide dissenting secured creditors a sum...more

Developers personally liable: insolvency and the SPV (UK)

Developers can be personally exposed if they control risk on a development through the limited liability of an SPV vehicle. A recent case holds directors persoanlly liable for the SPV's debts after they should have realised...more

Developer files for Bankruptcy, Entertainment Center in Jeopardy

A proposed plan to build New England’s first Brunswick Zone at 128 Newbury St., a spot on the highway near the intersection with Winona Street is now in danger of not getting off the ground. The local developer responsible...more

Recent Rulings by Bankruptcy Judges have Affected Chapter44A Lien Rights

By William C. Smith, Partner at Manning Fulton & Skinner, P.A. Collections have never been as important — or as challenging — as now. North Carolina construction industry vendors have long held an advantage over other...more

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