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Constitutional Law and the Bankruptcy Clause: An in-depth discussion on the Supreme Court's deliberations.

In a troubled business climate, a scenario all too often occurs wherein a once steady and reliable customer becomes delinquent in payment and eventually files for bankruptcy protection. In this common situation, your client's good customer becomes a debtor and your client becomes one of many creditors jockeying to recover a small portion of its investment. To make matters worse, your client receives a letter from the debtor or court appointed trustee demanding repayment of a pre-petition preferential payment pursuant to section 547(b) of the Bankruptcy Code (the Code).

<i>Nothing ... in the Code covers payments made to pre-existing, unsecured creditors, whether or not the debtor calls them 'critical.' Judges do not invent missing language ... A 'doctrine of necessity' is just a fancy name for a power to depart from the Code. In re Kmart Corp.</i>, 2004 U.S. App. LEXIS 3397, *5, *11 (7th Cir. Feb. 24, 2004) (Easterbrook, J.)

Exclusions from operating expenses are frequently the subject of much wrangling between landlords and tenants in lease negotiations. Many sophisticated parties will deal with such exclusions in the Letter of Intent, a method which allows the business people to focus on the issue early, rather than having the lawyers argue about it during the lease negotiation.

Highlights of the latest commercial leasing cases from around the country.

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Everyone wants to do the deal, but no one is ready to sign the lease. Zoning approvals, construction plans, financing, and a host of other issues need to be firmed up before the lease will be signed, but it is a lot of time and expense to go through if there's no agreement on the essential terms of the relationship. Hence, the Letter of Intent ("LOI"). An LOI is intended to, and should, give assurances to the parties, fix the agreed-upon terms of the deal, provide information and assurances to third parties, and provide a framework for further negotiations and the definitive agreement. It can, however, also be a minefield of potential problems and an invitation to litigation. This article reviews some of those problems and suggests ways to accommodate the parties' needs while avoiding the most common dangers.

Although the primary purpose of real estate leases is to rent space, tenants should take the time to develop and implement lease strategies that facilitate their operational methods and strategic plans.

This two-part article explores some of the issues that arise when negotiating a lease form that contains clauses defining the rights of the landlord and obligations of the tenant with regard to remodeling or expanding a shopping center. The first part of the article discussed negotiating points that could benefit the parties during the administration of the lease. The conclusion provides some suggested model language to consider when drafting a lease.