In In re 1141 Realty Owner LLC, et al. , No. 18-12341 (SMB), 2019 WL 1270818 (Bankr. S.D.N.Y. March 18, 2019), Bankruptcy Judge Stuart M. Bernstein of the U.S. Bankruptcy Court of the Southern District of New York reaffirmed that upon sufficient contractual language, “make whole” prepayment premiums are enforceable under New York law even after loan acceleration. The court emphasized that the language of the contract provided for such a result and that this was an enforceable liquidated damages clause under New York law.
Continue Reading

On 23 May 2018, New York’s Appellate Division, Second Judicial Department (an intermediate appellate court covering a vast swath of “downstate” New York) decided Soroush v. Citimortgage, Inc.  – a closely watched case that many in the industry worried would decide the fate of “de-acceleration letters.” De-acceleration letters are commonly used by loan servicers as a tool to revive aged defaulted mortgage loans that otherwise would be in danger of becoming time-barred.

Continue Reading

Another step towards a lender-friendly environment, but the new form of pledge is being delayed

The Italian Parliament passed law No. 155 of 19 October 2017 to delegate the Government to reform the rules on insolvency and financial distress. This has been commented widely in the press and between commentantors, as it is expected to bring about significant developments (we have previously reported here).

What has received less attention, is that the law also mandates Government to reorganise the system of legal priorities (privilegi), i.e. the rights of preference set out at law for given claims to have preference over other creditors. Further, the delegation includes the authority to introduce a form of non-possessory security over moveable assets.
Continue Reading

There has been considerable controversy about the extent of the powers, and the extent of obligations of a business rescue practitioner in relation to a cession of book debts by the company in rescue.  This is an important issue in business rescue because most financially distressed companies have an overdraft facility with a bank which