Index
March 03, 2004
A complete listing of everything contained in this issue.
Successor Liability of UCC Foreclosure Sale Purchasers
March 03, 2004
As a result of non-eviction co-op conversion plans, many rent-stabilized tenants live in co-operative apartment units. Suppose the apartment's owner overcharges the tenant. May the tenant recover the overcharge from a successor owner who purchased the co-operative unit at a UCC foreclosure sale? That issue, faced by a New York court in <i>Muscat v. Gray</i> (<i>infra</i> page 3 ), raises questions both of statutory construction and public policy.
Shopping Center Remodeling and Expansion: Considerations and Drafting Points
March 01, 2004
In today's commercial real estate market, with new shopping centers being developed at a rapid pace, landlords and tenants in existing older shopping centers have to work diligently to stay competitive. A factor that should be considered by both parties to stay competitive includes the eventual need to remodel and/or expand the shopping center.
The Leasing Hotline
March 01, 2004
Highlights of the latest commercial leasing cases from around the country.
True Lease v. Disguised Security Interest: A New Dilemma
March 01, 2004
Over the past several years, courts faced with the issue of whether a lease is a "true lease" or a "disguised security interest" have been making it more and more difficult for lessors to have their leases confirmed as true leases. Through a process of focusing on economic reality instead of the intent of the parties and increasing the amount of residual value required at the end of a lease term, courts are creating a dilemma for the leasing industry. Certain segments of the equipment leasing industry are more severely effected by these changes than others.
Reforming Characteristics of Maintenance Deposits to Avoid Treatment as Cash Collateral
March 01, 2004
One of the common issues facing businessmen and lawyers in the lease financing of complicated equipment such as aircraft, is how to impose an obligation upon the lessee to pay and segregate funds sufficient to assure aircraft maintenance expenses, while preventing these funds from being treated as property of a debtor and cash collateral within the meaning of Bankruptcy Code Section 363 (11 U.S.C. '363). If a lessee is asked in a written lease agreement to deposit, from time to time, contemplated amounts of cash by which to assure the lessor that certain long-term maintenance obligations will be funded and completed, or that rent will be paid, then there is a risk that these deposits might be treated as cash collateral and property of the estate. This subjects the lessor to the risk that the bargained-for cash set-aside funds, might, in a bankruptcy case context, not be available for the purposes for which they were originally intended. This article addresses a risk avoidance approach to that problem.
A New Reality for Lessors in Synthetic Leasing Transactions
February 10, 2004
In a discussion of the Financial Accounting Standards Board (FASB) Interpretation No. 46, Consolidation of Variable Interest Entities, in the November 2003 issue of this newsletter, Jeffrey Ellis wrote that: "accountants will be struggling to implement the guidance in FIN 46 for a while longer." The multiple FASB staff positions issued, ongoing public comment, and lengthy discussions at FASB meetings concerning changes to existing guidance on consolidation of variable interest entities, continuing almost a full year after issuance of the rules, confirm his conclusion. The effective date for certain applications of FIN 46 was delayed until Dec. 31, 2003, but all of the Big Four firms continued to clamor for guidance. With that new deadline only days away, FASB issued FIN 46-R on Dec. 24.
