In the Spotlight: Renovation of Existing Buildings
September 26, 2007
As commercial landlords in cities nationwide continue to look toward renovating or converting their commercial properties to other uses, and in particular into residential condominiums, many do not fully consider the dynamics between the existing tenants and the conversion process, which can result in decreased profits for the entire conversion or renovation project. Often, the interests of the existing tenants and renovating landlords are irreconcilably adverse to each other. Any landlord that fails to consider the 'cross-purpose dynamics' between the existing tenant's interests and its own interests in renovating or converting the property places itself in a common trap. Unsuspecting landlords that may think they are undertaking a simple and profitable conversion find that the renovation process can prove costly and fraught with contentiousness and hostility. Careful consideration of a few key issues can help landlords be sensitive to and avoid problems that arise from the cross-purpose dynamics inherent in many commercial renovations.
Self-Help and Set-Off Rights: A Primer
September 26, 2007
'Rent is an independent covenant.' These are words historically coveted by nearly every landlord. In most cases, interestingly, the independent nature of the payment of rent is not troubling to tenants or their counsel. In some jurisdictions, the concept of 'dependant covenants' is surfacing if the parties do not specify otherwise. From time to time, however, a tenant will require the landlord to insert provisions providing the right to self-help and/or the ability to set-off against rent, concepts that are contrary to the independent covenant doctrine. For well-heeled landlords, this is problem enough. Add a lender to the mix, particularly in instances where consent to the lease is required, and the matter quickly becomes complicated. The landlord's interests lie in keeping others from acting on its behalf with respect to its property and preserving its cash flow. The tenant's interests lie in making sure that the landlord performs its obligations under the lease and, if the tenant is required to act for the landlord, that the tenant has a source of funds to reimburse it for doing so. Finally, lenders are most interested in stable cash flow, continued loan repayment, and the avoidance of disputes to which they may become a party.
Exploring the Outer Limits of ' 363(f) Clearance
September 26, 2007
Bankruptcy offers an attractive platform for the sale of assets because it is injected with a statutory prerogative allowing for the clearance of third- party interests. Specifically, ' 363(f) of the Bankruptcy Code permits the sale of bankruptcy estate property 'free and clear of any interest [of any other entity] in such property' provided that certain conditions are satisfied. Notwithstanding that grant of authority, however, the Bankruptcy Code does not specifically define the phrase 'any interest in such property' or otherwise specify the scope of interests that the phrase is intended to cover.
Riding the Fulcrum Seesaw
September 26, 2007
Troubled businesses also may have turned to the distressed debt market instead of filing for bankruptcy protection due to recent changes to the Bankruptcy Code, which made bankruptcy a more complicated, expensive and uncertain alternative. As a result, when the next wave of Chapter 11 filings comes, hedge funds and other distressed debt investors will act to protect their unique interests and strategies, which will bring new dynamics to bankruptcy cases.
Court Watch
August 31, 2007
Highlights of the most recent franchising cases from around the country.
Case Notes
August 31, 2007
Highlights of the latest commercial leasing cases from around the country.
Movers & Shakers
August 30, 2007
News about lawyers and law firms in the commercial leasing industry.
The Leasing Hotline
August 30, 2007
Highlights of the latest commercial leasing cases from around the country.
Be the Quarterback
August 30, 2007
Last month's installment discussed how a real estate attorney should create a checklist to bring a transaction from concept to fruition. Part Two of this series addresses compliance issues, dissemination of information, and the level of detail of the checklist.
In the Spotlight: Beware of 'Lite' Indemnification
August 30, 2007
Some commercial landlords consider indemnification clauses in leases to constitute mere 'legal boilerplate' that do not merit attention from a business perspective. Some lawyers, feeling pressure to minimize the length of lease documents, may seize upon this clause as an opportunity to save space. As a result, it is not uncommon to encounter abbreviated indemnification clauses. At first glance, the language appears suitable. However, when put to the test, these 'lite' clauses often leave landlords unsatisfied. This article demonstrates the value of 'kicking it up a notch' by including ingredients called for in the recipe but often left out of the mix.
