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A bankruptcy court gave “unnecessary and likely incorrect” reasoning to support its “excessively broad proposition that sales free and clear under [Bankruptcy Code (“Code”)] Section 363 override, and essentially render nugatory, the critical lessee protections against a debtor-lessor under [Code] 365(h),” said the U.S. Court of Appeals for the Fifth Circuit on Feb. 16, 2022. In re Royal Bistro, LLC, 2022 WL 499938, *1-*2 (5th Cir. Feb. 16, 2022). The court still denied the lessees’ “motion for a writ of mandamus” for a “stay pending appeal” from a bankruptcy court order authorizing the trustee’s sale of “the debtor’s real property … free and clear” of the lessees’ interests. Id. at *1. In essence, though, the Fifth Circuit signaled that it would not approve in later cases a bankruptcy court asset sale of real property that summarily cuts off the rights of the debtor’s lessees.
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Can a Tenant Enforce a Right of Refusal In Third-Party Sale?
By Alan Nochumson and Alex Goldberg
In Tri-Outdoor v. Keyser, the Pennsylvania Superior Court recently addressed whether a tenant could specifically enforce a right of first refusal provision contained in a lease agreement where the landlord sold the leased premises to a third-party purchaser.
When to Raise Equity Capital In a Fund Structure
By Joseph J. Ori
Gravitating to a fund structure is also no easy task and as with any investment program, the first one is always the most difficult. However, the benefits far outweigh the costs for any experienced real estate investment firm. The primary concern with a fund structure is who will sell the equity in the fund.
Rulings on COVID-19 Defenses In Commercial Real Estate
By Massimo F. D’Angelo and Gregory Wong
Despite some new variants and a possible resurgence in the fall, the pandemic closures seem to be finally coming to an end. And with it, so too have most of the COVID-19 defenses in court cases involving commercial leases. However, all may not be foreclosed for a commercial tenant, particularly where a tenant is able to point to a specific provision of its lease that could excuse its obligation to pay rent during the closure of its business.
By CLLS Staff
A compilation of commercial real estate rulings in courts across the country.
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