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In an important decision for debtors and creditors alike, the United States Bankruptcy Court for the District of Delaware has ruled that provisions in a limited liability company operating agreement, granting the company’s lender absolute power to prevent the company from filing a bankruptcy petition are unenforceable as against public policy.
In the event a borrower is seriously delinquent on making payments under a SBA loan, or the SBA loan is classified in liquidation status, lenders and CDCs must develop a prudent and commercially reasonable strategy to maximize their recovery on the loan. 60 calendar days), the lender/CDC must move forward with liquidating the collateral.
Meek have been recognized in the January 2022 issue of Lawdragon’ s “500 Leading Bankruptcy & Restructuring Lawyers” List. Lawdragon says, “The start of the pandemic brought expectations for mountains of commercial bankruptcy work. Golden was named in the Bankruptcy & Commercial Litigation specialty.
SBA lenders should understand the appropriate protocols after receiving an offer in compromise from a borrower, including what an offer in compromise is, when it is appropriate, the general requirements, and the process for reviewing, approving and completing a compromise. If there are any discrepancies, the lender must investigate them.
Lenders often go to great lengths to ensure their borrowers are Special Purpose Entities —entities whose assets will not be commingled with the assets of parent or affiliated companies—rendering bankruptcy filings by the SPE less likely. In Opportunity Finance , the debtors were Petters Company, Inc. (“PCI”) The Eighth Circuit agreed.
In reviewing a loan file after a default by a borrower, lenders should evaluate whether the loan includes an acceleration clause and whether the loan is secured by any personal guaranties. Part 2 of this series analyzed pre-foreclosure loss mitigation options for lenders dealing with hotel/restaurant mortgage defaults.
Parts 1-3 of this series explored alternative pre-foreclosure loss mitigation options for lenders including acceleration and enforcement of personal guarantees. Upon default by the borrower, the lender/mortgagee can enforce the assignment of rents provided the lender/mortgagee makes written demand to the borrower for payment of the rents.
Many lenders attempt to render their borrower bankruptcy remote by requiring the borrower to have on its board a director, known as a “blocking director,” whose consent is required for any bankruptcy filing. If they don’t, a lack of the blocking director’s consent may not prevent the borrower from filing bankruptcy.
Although a lender may have won the battle by obtaining a final judgment of foreclosure from the court, it may not win the war. Although a lender may not be able to avoid this from happening, it should be aware of how and why their final judgment of foreclosure may be set aside. Pursuant to Section 702.07 Pursuant to Section 702.07
The Act codifies existing common law in Florida regarding the right to have a receiver appointed by the court in commercial foreclosure actions, and provides much needed clarity, predictability, and uniformity on the standard for the appointment of a receiver and the powers of receivers. What is a Receiver, and Why are They Important?
If you’re struggling with financial hardship, filing for bankruptcy can be an effective way to get back on your feet. But filing for bankruptcy in Indiana doesn’t mean every outstanding debt you’ve ever incurred gets wiped away. Declaring bankruptcy will discharge most types of debt but not others. What do we mean by this?
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