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Commercial Leasing Law & Strategy
Why Tenants Get Stuck in Bad Leases and How to Avoid It
Mark Foster
Tenants end up signing leases that offer little to no flexibility as their businesses expand and contract, setting the stage for economic and operational stress that could have been avoided with upfront planning and prudent lease negotiations.
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Commercial Leasing Law & Strategy
Simon v. Starbucks: Preliminary Injunction Granted to Prevent Store Closings
Marisa L. Byram
While the court will not have the opportunity to rule on the merits of the case, the facts relied upon by the Indiana Superior Court and the conclusions reached in rendering its decision are still instructive for practitioners drafting continuous-use provisions and advising clients on potential breaches or anticipatory breaches of such provisions.
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Commercial Leasing Law & Strategy
Regulating Interior Landmarks: New York Court Says Duties Don’t End
Stewart Sterk
What powers does the New York City Landmarks Preservation Commission have to require a building owner to maintain a mechanical clock located in the interior of a building? In Save America’s Clocks, Inc. v. City of New York, New York’s Appellate Division, First Department, held that the Commission had power to require maintenance of the clock, and to require public access to it.
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Commercial Leasing Law & Strategy
Case Notes
Suit in Second Jurisdiction Is Duplicative
Mailing Rent Check While Doing Unauthorized Acts Is Not Mail Fraud
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Commercial Leasing Law & Strategy
Recreational Marijuana in New Jersey
Richard G. Lyons
Real Estate and Other Issues Will Need Consideration
Given NJ Governor Phil Murphy’s campaign pledge to legalize marijuana for recreational use in his first 100 days, the state is on the cusp of a major new revenue stream-recreational marijuana.
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The Bankruptcy Strategist
What Retailers Can Learn from Recent Bankruptcies
Corali Lopez-Castro and Mindy Y. Kubs
Understanding the factors leading up to these bankruptcies, as well as the strategies used by retailers to emerge from bankruptcy, can give retailers significant knowledge about trends in consumer spending and how retailers can improve their overall positions going forward.
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New York Real Estate Law Reporter
Development
Failure to Require SEIS Not Arbitrary
Board of Fire Commissioners Lacks Standing to Challenge SEQRA Determination
Challenge to Pilot Agreement Reinstated
Statute of Limitations Bars Challenge to Excessive Height
Billboard Regulation Upheld
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Commercial Leasing Law & Strategy
Serving Two Masters: When ‘Bankruptcy Remote’ Meets Public Policy
Pamela J. Martinson
How Lenders to BREs Can Reduce the Risk of Debtor Bankruptcy Without Compromising Public Policies
Structured financing transactions, including those pertaining to commercial real estate, make extensive use of entities formed for the specific purpose of reducing the likelihood that assets will be involved in a potential bankruptcy proceeding. Known as “bankruptcy-remote entities,” or “BREs,” these entities are subject to structures and covenants in financing documents and their own formation documents, which are designed to reduce the likelihood that the BRE will file for bankruptcy protection.
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The Bankruptcy Strategist
Anti-Forfeiture Statute Saves a Debtor’s Exercise of Option to Renew Lease
Barry M. Klayman and Mark E. Felger
In a recent decision, Bankruptcy Judge Christopher S. Sontchi addressed the question of whether a Chapter 11 debtor, the tenant under a commercial lease, could exercise an option to renew the lease during the bankruptcy proceedings, even though the debtor was in default under the lease and the lease specified that it could not be renewed if defaults existed at the time the option was exercised.
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New York Real Estate Law Reporter
Landlord & Tenant
Section 8 Status Protects Tenant from Eviction
Questions of Fact About Acceptance of Surrender
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Commercial Leasing Law & Strategy
Case Notes
Moratorium Invalidated Where Consideration of Zoning Changes Not Planned
In Texas, LLCs Cannot Be Made to Pay Attorney Fees
No Interaction, No Equitable Tolling
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New York Real Estate Law Reporter
Real Property Law
Punitive Damages for Intentional Encroachment
Questions of Fact About Readiness to Perform
Issues of Fact Preclude Summary Judgment in Action for Brokerage Commission
No Meritorious Defense to Foreclosure Action
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New York Real Estate Law Reporter
Development
Town Board Failed to Take ‘Hard Look’ at Amendment
Jurisdictional Determination from Army Corps
Developer Failed to Allege Concrete Injury
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Commercial Leasing Law & Strategy
Lender’s Choice In Naming Defendants Is Under Assault
Bruce J. Bergman
Can a foreclosing plaintiff choose whom to name as a party defendant in a foreclosure action? In New York, in the absence of prejudice to the defaulting property owner, the answer is yes. Although a recent holding of New York’s Appellate Division, Second Department, tacitly suggests “no,” the case may not have addressed the actual controlling principles.
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New York Real Estate Law Reporter
Landlord & Tenant
Renewal Option
Illusory Tenancy Claim
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Commercial Leasing Law & Strategy
Case Notes
Trial Required to Disprove Malice
Court Upholds Conditions Imposed on Zoning Variance
Lease Identified
Notice of Termination Not Defective for Being Sent By Attorney
Hearing Required to Determine Whether Lease Denied for Unconstitutional Reasons
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Equipment Leasing Newsletter
‘Trial of the Century’ Takes on Hell or High Water
Paul Bent
Will a Rising Tide of Managed Solutions Transactions Sink the Most Venerated of Leasing Provisions?
There is change afoot in the equipment leasing marketplace, and it portends a potentially seismic shift in the perception, usefulness and utility of the well-tested HOHW clause.
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Equipment Leasing Newsletter
How 2018 Tax Changes Will Affect Companies Focused on Truck Acquisition
Brian Holland
Corporations with private fleets in the U.S., as well as for-hire carriers, have begun ordering faster than before. As the economy continues to strengthen, this trend will continue to grow and so will the need to replace aging equipment.
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Commercial Leasing Law & Strategy
Surviving the Retail Shift
Kelly D. Stohs and David P. Vallas
Looking Ahead: Lessons Learned.
Part Five of a Five-Part Series.
As Mark Twain quipped, "The reports of my death are greatly exaggerated." So too is the reported retail "apocalypse" and "death" of the shopping center. In fact, U.S. retailers opened 1,326 more locations in 2017 than they closed. When restaurants are added to the mix, there were a total of 4,080 new openings in 2017 and another 5,050 openings planned this year.
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Equipment Leasing Newsletter
Recognizing the Signs of Financial Distress
Steven Strom
Diagnosing financial distress, and the ability to address the relevant issues, is a necessary role of board members and senior executives.
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Equipment Leasing Newsletter
Shipping Insolvencies and Texas Businesses
Nicole Hay and Thomas Scannell
Texas businesses and their attorneys should be aware of legal and practical issues that may arise in the event of a shipping insolvency. Two particularly murky areas that have been illuminated by recent case law are maritime liens and reclamation rights.
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Commercial Leasing Law & Strategy
Case Notes
An in-depth discussion of two major rulings.
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The Corporate Counselor
FATCA Revamp
Ashley M. Elmore Drew and Adam J. Knight
Will Your Company Be Prepared?
FATCA is an effort by the United States to curb tax evasion and incentivize Foreign Financial Institutions (FFI) to report the overseas assets of U.S. persons. The U.S. encourages compliance by imposing a 30% withholding penalty on all U.S. source income and sale proceeds of non-compliant foreign financial institutions.
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Commercial Leasing Law & Strategy
Defenses of Impossibility of Performance and Frustration of Purpose
Thomas J. Hall
Parties in complex commercial cases that are accused of defaulting on or breaching a contract may invoke the defense of impossibility, arguing that performance of contractual obligations was rendered impossible by an intervening event. But under New York law, those arguments rarely make it past the motion stage.
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Commercial Leasing Law & Strategy
Case Notes
Discussion of a case in which a trial court sided with the property owner/defendant where the tenant sought to terminate the lease early, but could not because it was not in compliance with one of the requirements for early termination.
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Equipment Leasing Newsletter
Industry Growth Trending Up for the Year
The Equipment Leasing & Finance Foundation has released its Q4 update to the 2017 Equipment Leasing & Finance U.S. Economic Outlook, which increased its yearly equipment and software investment forecast to 4.3%, up from 3.6% forecast in the Q3 Outlook.
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Equipment Leasing Newsletter
Discovery Strategies for a Creditor in a Bankruptcy Case
Deirdre M. Richards and Howard C. Rubin
Beyond Filing a Proof of Claim
This article explains the rights of a creditor, whether an equipment financier or otherwise, to pursue examinations of a debtor in bankruptcy in order to obtain sworn testimony and information that may be helpful to the creditor.
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Equipment Leasing Newsletter
Cybersecurity in Commercial Equipment Leases
Michelle Schaap, Frank Peretore and Robert Hornby
Hidden Liability for the Unwary Lessor
Much has been written in the industry about equipment lessors' cybersecurity practices for the protection of their information. The issue addressed herein is the equipment lessor's obligations and potential liability for information stored on equipment returned to the lessor at the end of a lease.
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Equipment Leasing Newsletter
Is Electricity a 'Good' Under Article 9?
Barbara M. Goodstein
Can a creditor obtain a security interest in electricity under UCC Article 9? It covers security interests in fixtures and personal property. Clearly, electricity is not real property or a fixture. But what kind of personal property is it?
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The Corporate Counselor
DE Supreme Court Clarifies Role of Deal Price In Appraisal Fair Value Determination
P. Clarkson Collins Jr.
Corporate practitioners have been closely following developments in Delaware's shareholder appraisal litigation. Much of the interest concerns the court's "fair value" determination and the risk that an acquiring company will have to pay appraisal petitioners more than the merger deal price. In a much-anticipated decision, the Delaware Supreme Court provides valuable guidance about the relative importance of the deal price in the court's adjudication of the "fair value" of a petitioner's shares.
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Equipment Leasing Newsletter
What's New in the Law
Robert W. Ihne
Who's doing what; who's going where.
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The Corporate Counselor
Litigation Risk Mitigation Through the Use of Third-Party Litigation Funding
Jonathan Friedland, Elizabeth Vandesteeg and Jeffrey Goldberg
Third-party litigation funding is a relatively new, but rapidly expanding litigation financing vehicle. General counsel and commercial litigators would be well served to understand the changing landscape regarding the scope and potential uses of such funding.
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Equipment Leasing Newsletter
POCs and the FDCPA: A License to File
Chris Hawkins and Karlene Archer
Buyers and servicers of “stale,” or time-barred, debt have been watching the bankruptcy and appellate courts closely of late, as court after court has ruled on whether a key component of their recovery strategy — seeking payment related to such time-barred debts by filing proofs of claim in bankruptcy — violates the Fair Debt Collections Practices Act (FDCPA).
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Equipment Leasing Newsletter
Equipment Lessors and Bankruptcy
Michael A. Brandess and Jonathan Friedland
Much has been written about the risk that a transaction denominated and documented as an equipment "lease" may be recharacterized a security interest. Equipment lessors seem to understand. Interestingly, equipment lessors commonly seem to not understand all of the rights and remedies they have in the absence of recharacterization. So, what's a true equipment lessor to do in the face of the Chapter 11 of its lessee?
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The Corporate Counselor
What Can We Tell About the Trump Administration’s Focus on Compliance?
Annette K. Ebright and Sarah F. Hutchins
There are a few early signs that the Trump administration will continue to hold companies to the “way of compliance.” But after the first five months of his presidency, there are still questions about where enforcement is heading in specific compliance areas.
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Equipment Leasing Newsletter
Third Circuit Sides With Creditors in EFIH Make-Whole Dispute
John J. Rapisardi and Joseph Zujkowski
At the end of last year, the Third Circuit added to several recent decisions addressing whether a creditor was entitled to payment of a "make- whole" premium in connection with a Chapter 11 case. The court's opinion is the most creditor-friendly decision issued to date on this topic.
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Equipment Leasing Newsletter
In the Marketplace
Who's doing what; who's going where.
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Equipment Leasing Newsletter
Using a True Lease or a TRAC Lease
Deirdre M. Richards
Potential Complications in Bankruptcy
An equipment financing company will often decide whether it wants a transaction to be a true lease or a TRAC lease as opposed to a retail sale. A good reason to be able to make the distinction is to determine what might be the best structure for an equipment financier. This article explores the differences.
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Commercial Leasing Law & Strategy
Stick to the 'Plain Meaning'
Janice G. Inman
Interpreting Lease Contract Terms
The complications that can and do arise in the field of commercial leasing come in all shapes and sizes, and not all can be anticipated. However, with careful planning, and if the stars align, lease terms sometimes cover even an abnormal future event, preserving the agreement that the parties undoubtedly contemplated at signing
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Equipment Leasing Newsletter
Railcar Leasing on the Rise
According to a recent analyst report from global market research company, Technavio, the railcar leasing market in North America, is predicted to grow steadily at a Compound Annual Growth Rate of above 9% by 2021. The report, titled Railcar Leasing Market In North America 2017-2021, finds that one of the primary drivers for this market is the rise in the demand for tank cars due to growing crude oil production.
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Commercial Leasing Law & Strategy
Commercial Leases and the Law of Electronic Transactions
David P. Resnick and Seth Corthell
Over the past 20 years, the rise of email as a generally-accepted medium of business communication has prompted the law to allow certain contracts, including leases, to be entered into electronically, without a handwritten signature. This article addresses recent developments and the present state of the law with respect to commercial leasing and electronic media.
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Equipment Leasing Newsletter
Beware: Inspecting Goods May Waive Implied Warranty Protections
Louis DePaul and Allison Ebeck
When purchasing goods though an invoice, contract or otherwise, it is important to understand that a mere inspection of goods prior to purchase could waive implied warranty protections. A seller may effectively modify, or entirely exclude, implied warranties under the Uniform Commercial Code (UCC) by requiring a buyer to inspect, test or examine goods prior to purchase.
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Commercial Leasing Law & Strategy
When Actions Speak Louder Than Words
Kelly M. Gorman
Written Agreements Are Not the Final Word
Recently, an Ohio appellate court held that the parties' actual conduct — and not the express written provisions in their lease to the contrary — controlled in interpreting the intentions of the parties in contracting. This case serves as a good reminder for legal practitioners that our written agreements are often not the final word.
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Equipment Leasing Newsletter
Industry Growth Forecast for 2017
Slight Downgrade
The Equipment Leasing & Finance Foundation has released its Q2 update to the 2017 Equipment Leasing & Finance U.S. Economic Outlook, which lowered slightly its yearly equipment and software investment forecast to 2.8%, down from 3% growth forecast in its 2017 Annual Outlook released in December 2016.
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Equipment Leasing Newsletter
In the Marketplace
Who's doing what; who's going where.
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Equipment Leasing Newsletter
Professional Fees May Not Be Capped by Standard Carve-Out Provisions
John C. Tishler and Tyler N. Layne
Secured creditors and debtor-in-possession (DIP) lenders that rely on standard carve-out provisions to limit the impact of bankruptcy professional fees on their collateral would be well-advised to take notice of a U.S. Bankruptcy Court decision from earlier this year.
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The Bankruptcy Strategist
Court Rules That Professional Fees May Not Be Capped by Standard Carve-Out Provisions
John C. Tishler and Tyler N. Layne
Secured creditors and debtor-in-possession (DIP) lenders that rely on standard carve-out provisions to limit the impact of bankruptcy professional fees on their collateral would be well-advised to take notice of a U.S. Bankruptcy Court decision from earlier this year.
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Equipment Leasing Newsletter
Split Ninth Circuit Requires Default Interest to Cure Default
Michael L. Cook
A Chapter 11 debtor "cannot nullify a preexisting obligation in a loan agreement to pay post-default interest solely by proposing a cure," held a split panel of the U.S. Court of Appeals for the Ninth Circuit.
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Commercial Leasing Law & Strategy
Challenges in Drafting a Restaurant Exclusive Use Clause
Stephen Levey
The reasonable and typical middle ground in the struggle between the parties regarding the scope of the "exclusive" is to protect only a tenant's "core" or "primary" business. Using such an approach, if properly drafted, will allow the tenant to avoid the two-coffee-shop situation, but will still permit the landlord to lease to multiple tenants with overlapping but not fundamentally competing uses.
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Equipment Leasing Newsletter
Make-Whole Mayhem
Jeffrey R. Gleit and Nathaniel R.B. Koslof
Uncertain Treatment of Make-Whole Premiums Upon Bankruptcy-Induced Acceleration and Redemption of Indentures
Make-whole premiums are essentially prepayment penalties imposed on borrowers when loans are paid off in advance of their maturity dates. These premiums remove the borrowers' incentives to refinance whenever interest rates drop, and provide stability and predictability to the world of secured lending.
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