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Lessors who repossess property immediately prior to a lessee bankruptcy filing may be required to return such property or face sanctions by the bankruptcy court. Federal courts are currently split on the issue of whether the lessor must voluntary surrender property seized pre-petition or may hold such property until such time as the debtor seeks, and obtains, an order of turnover. In June, the U.S. Court of Appeals for the Seventh Circuit weighed in and decided four appeals involving chapter 13 debtor filings following the City of Chicago’s seizure of vehicles based on unpaid fines. See, In re Fulton, 2019 U.S. App. LEXIS 18393 (7th Cir. 2019). In Fulton, the Seventh Circuit ruled that the City of Chicago must comply with the automatic stay by returning impounded cars immediately after being notified of a chapter 13 filing. (The Fulton decision is not the first time the Seventh Circuit decided the issues presented. In 2009, the court held that a creditor must comply with the automatic stay and return a debtor’s vehicle upon her filing of a bankruptcy petition. See, Thompson v. General Motors Acceptance Corp., 566 F.3d 699 (7th Cir. 2009)).
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Sui Generis: Negotiate Like You Mean It
By Lydia Pilch
As further follow-up regarding tracking of the lifecycle of a commercial lease, Part Two of this series addresses various negotiation events, strategies, desired outcomes and potentially low key disasters.
New York’s Guaranty Law Continues to Divide Opinion
By Matthew J. Schenker and Joshua Kopelowitz
This article discusses the recent developments surrounding the constitutionality of New York's Guaranty Law. In particular, we address the Southern District’s view that the statute is unconstitutional and the splintered view of the statute’s constitutionality expressed by New York State courts.
Don’t Get Caught Holding a Conditional Loan Approval at Closing
By Matthew Kramer
With rising interest rates and more stringent lending standards for both residential and commercial properties, security deposit disputes caused by buyers’ inability to satisfy pre-closing purchase-financing conditions are also increasing.
New York’s Seldom Used Expedited Money Judgment Mechanism: CPLR 3213
By Massimo F. D’Angelo and Gregory Wong
In New York state and local court cases, there is a seldom-used procedural mechanism for obtaining an expedited money judgment against a guarantor. This article provides an overview of CPLR 3213 motions, an update on the resolution of the split that previously existed between the New York State Supreme Court, Appellate Division, First and Second Departments, and practical guidance for transactional counsel drafting commercial leases and guaranties.
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