Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
Personal Guaranty of Commercial Lease Held Discharged in Guarantor's Bankruptcy
As we work remotely and prepare for the anticipated increase in bankruptcy filings caused by the COVID-19 pandemic impact on the economy, many practitioners are trying to compare this cycle to cycles past, going back all the way to the savings and loan crisis of the late 1980s. One of the co-authors never ceases to be amazed by issues that keep coming up in bankruptcy cases cycle after cycle. One of them is whether a personal guaranty of a commercial lease is discharged in the bankruptcy of the individual guarantor. Court decisions have split on this issue for years.
The issue was recently considered by the bankruptcy appellate panel for the U.S. Court of Appeals for the Sixth Circuit in Orlandi v. Leavitt Family Limited Partnership (In re Orlandi), Case No. 19-8001 (Feb. 28, 2020). The court held that a prepetition guaranty given by the debtor was a contingent claim discharged by the bankruptcy. The court also analyzed and interpreted a recent U.S. Supreme Court ruling on what constitutes a willful violation of the discharge injunction.
Pre-Bankruptcy Guaranty, Post-Bankruptcy Collection Efforts
The opinion recited the relatively straightforward facts of the case. The debtor owned a salon in Mayfield Heights, OH. In 2005, the debtor signed a shopping center lease on behalf of the business salon entity and executed a personal guaranty of the salon's lease obligations.
This premium content is locked for Entertainment Law & Finance subscribers only
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN ENTERTAINMENT LAW.
- Stay current on the latest information, rulings, regulations, and trends
- Includes practical, must-have information on copyrights, royalties, AI, and more
- Tap into expert guidance from top entertainment lawyers and experts
Already a have an account? Sign In Now Log In Now
For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
A Lawyer's System for Active Reading
Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.
Protecting Innovation in the Cyber World from Patent Trolls
With trillions of dollars to keep watch over, the last thing we need is the distraction of costly litigation brought on by patent assertion entities (PAEs or "patent trolls"), companies that don't make any products but instead seek royalties by asserting their patents against those who do make products.