Commercial Restructuring & Bankruptcy Alert - June 2012

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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’ Rather Than ‘Per Plan’

- Court Rejects ‘Whole Enterprise’ Argument of Jointly

- Administered Debtors; Holds Each Debtor is a SARE

- Court Analyzes Objective Factors to Find Chapter 11 Petition Filed in Bad Faith

- Rental Payments and Administration Expenses Back in the Spotlight: Luminar Decision Clarifies Circumstances in Which Rental Liabilities Qualify as Administration Expenses

- Creditor’s Proposed Plan Violated Absolute Priority Rule – Court Dismissed Bankruptcy Case

- Dividend Paid in LBO/Recapitalization Not Protected by 546(e) Safe Harbor

- Asset Purchasers May Be Subject to Seller’s Liabilities, De Facto Merger Doctrine Expanded in Pennsylvania

- Ending Forbearance is Not Equivalent to Economic Duress

- Statute of Frauds Bars Claims, Except for Interference with Prospective Contractual Relations

- Illinois Mortgagees Beware – Mortgages Lacking Interest Rate and Maturity Date Avoidable By Bankruptcy Trustee

- Split Continues – Individual Chapter 11 Debtors Not Subject to Absolute Priority Rule

- Court Relies on its Own Logic to Value Mortgage Servicing Rights

- SARE Creditor’s Right to Pre-Petition Interest Governed by State Law

- CMBS Certificateholder is Not a ‘Party in Interest’ in Chapter 11 Case

- Court Allows Pro Se Claimant to Withdraw Claim to Preserve Right to Jury Trial

- Indenture No-Action Clause Bars Suit Against Issuer, Directors and Officers

- Ipso Facto Clause Results in Master Lease Termination, Nullifies Sublessee’s Right to Possession

- Second Creditor Out of Luck in Debtor’s Fraudulent Transfer Scheme

- Secured Party Must Turn Over Repossessed Collateral if the Debtor’s Rights to the Collateral Were Not Terminated Pre-Petition

- Counsel’s Corner: News From Reed Smith

Please see full newsletter below for more information.

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