Landlords frequently run into unexpected problems — which I call "icebergs" — with their tenants, some of which were discussed in last month's Spotlight, <i>ie</i>, hazmat remediation. Here are a few more icebergs to watch out for.
Landlords and tenants occasionally ask whether they should bother to negotiate and execute a letter of intent to lease. Many wonder whether it might be more efficient to launch right into negotiating the lease itself. The investment in negotiating a letter of intent to lease will almost always pay quick dividends for landlords and tenants. The dividends may be in the form of an early discovery of a lack of agreement on an important issue that will allow the parties either to resolve it quickly or decide to terminate further negotiations and part ways. The more details sorted out during the letter of intent phase, the greater the likelihood of a smoother and successful consummation of the lease. Finding the proper balance of detail to include at the letter of intent phase is often a function of the nature and size of the transaction and the sophistication and leverage of the parties involved. This article is intended to help landlords and tenants consider what they may want to include in their letters of intent to lease.
Part One of this article discussed the <i>Penn Central</i> multifactor takings test. The conclusion addresses the "whole parcel" rule announced in <i>Penn Central</i> as well as the two-part takings test established by <i>Agins v. City of Tiburon</i>, 447 U.S. 255 (1980) and suggests strategies to redress loss of property values due to regulations.
Present-day real estate financing is significantly more complex than traditional financing. Sobered by borrower bankruptcies and compelled by rating agency requirements in the modern day era of mortgage securitizations, lenders are now looking to "mezzanine loans" to bridge the gap between senior debt and borrower equity. A mezzanine loan will often cover 50% to 90% of the equity required to acquire a property. In order to secure the repayment of a mezzanine loan, a lender customarily requires a pledge of the partnership or membership interests of the property owning entity.
“Baseball arbitration” refers to the process used in Major League Baseball in which if an eligible player's representative and the club ownership cannot reach a compensation agreement through negotiation, each party enters a final submission and during a formal hearing each side — player and management — presents its case and then the designated panel of arbitrators chooses one of the salary bids with no other result being allowed. This method has become increasingly popular even beyond the sport of baseball.
Insiders (and others) in the private equity business are accustomed to seeing a good deal of discussion ' academic and trade ' on the question of the appropriate methods of valuing private equity positions and securities which are otherwise illiquid. An interesting recent decision in the Southern District has been brought to our attention. The case is <i>In Re Allied Capital Corp.</i>, CCH Fed. SEC L. Rep. 92411 (US DC, S.D.N.Y., Apr. 25, 2003). Judge Lynch's decision is well written, the Judge reviewing a motion to dismiss by a business development company, Allied Capital, against a strike suit claiming that Allied's method of valuing its portfolio failed adequately to account for i) conditions at the companies themselves and ii) market conditions. The complaint appears to be, as is often the case, slap dash, content to point out that Allied revalued some of its positions, marking them down for a variety of reasons, and the stock price went down - all this, in the view of plaintiff's counsel, amounting to violations of Rule 10b-5.
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.
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.
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.
