News & Analysis as of

Fraudulent Transfers Lease Termination

Dechert LLP

Third Circuit Finds That Prepetition Option Termination Is Not Transfer

Dechert LLP on

Under Section 101(54) of the bankruptcy code, any means of disposing with an interest in property is considered a transfer, and therefore, under certain circumstances, may be avoided as a preference or fraudulent transfer. In...more

Jones Day

Eighth Circuit Rules that Bankruptcy Code's Cap on Lease Damage Claims Applies to Fraudulent Transfer Judgment

Jones Day on

To prevent landlords under long-term real property leases from reaping a windfall for future rent claims at the expense of other creditors, section 502(b)(6) of the Bankruptcy Code caps the amount of a landlord's claims...more

Pillsbury Winthrop Shaw Pittman LLP

Navigating Bankruptcy Exposure for Landlords Arising from Anticipated Lease Terminations During COVID-19

Lease terminations may result in fraudulent transfer claims. Lease terminations should document that the tenant is receiving reasonably equivalent value in exchange for rent forgiveness, relinquishing the premises and...more

Nutter McClennen & Fish LLP

Terminating a Distressed Tenant’s Lease – Part II

Last year the Seventh Circuit determined that a lease termination constituted a “transfer” within the meaning of the Bankruptcy Code and ordered litigation to continue against a landlord that had entered into a lease...more

Neal, Gerber & Eisenberg LLP

Back From the Dead: Voluntarily Terminating a Distressed Tenant’s Lease May Give Rise to an Avoidance Action in Bankruptcy Against...

A recent decision by the U.S. Court of Appeals for the Seventh Circuit should prompt landlords to give careful consideration before entering into a lease termination agreement with a distressed tenant. In In re Great...more

Burr & Forman

Termination of a Commercial Lease May be an “Avoidable Transfer” in Bankruptcy, holds Seventh Circuit

Burr & Forman on

In March 2016, the U.S. Court of Appeals for the Seventh Circuit ruled that a landlord may be liable to a debtor’s bankruptcy estate for the value of a lease the debtor terminated early, holding the termination may be an...more

Cozen O'Connor

Seventh Circuit Holds Pre-Bankruptcy Termination of Lease May Be Avoidable Transfer

Cozen O'Connor on

Landlords dealing with troubled tenants often enter into termination agreements that dictate terms for the consensual terminations of unexpired leases. Among other benefits, such termination agreements provide certainty and...more

McGuireWoods LLP

Seventh Circuit Holds that Pre-Bankruptcy Lease Terminations May Be Avoidable

McGuireWoods LLP on

In a case of first impression, the Seventh Circuit recently issued an opinion that may cause landlords and their advisors to re-evaluate the consequences of terminating a financially distressed commercial tenant’s lease prior...more

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