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2016 ended on a high note with higher than expected holiday sales and overall a better real estate market. However, there were a number of retailers that sought bankruptcy protection. Some of the retailers, like Fairway and EMS, emerged as new entities in Chapter 11 bankruptcy proceedings while their operations continued. Yet others, like Sports Authority and PacSun, closed their doors, leaving open spaces for landlords.
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Continue Reading 11 Retailers to Watch for Possible Bankruptcy Filings in 2017

Sports Authority, Inc. (“Sports Authority”) appears to likely be the next big tenant Chapter 11 bankruptcy filing. Recent reports are indicating that the sporting and apparel chain is preparing to file for Chapter 11 bankruptcy protection, as debt payments are due in 10 days, according news reports from Bloomberg Business and other outlets. Of its…

It is common knowledge that in the real estate market, the selling price for a mobile home is almost always dependent upon where is located. Yet, in a recent Chapter 11 case in the district of Delaware, Boomerang Tube LLC, the debtors relied upon a decision by Bankruptcy Judge Shannon, In re George Welch Sr. (Bankr. D. Del. October 19, 2015).

In that Chapter 13 setting, the debtor suggested that the replacement value of the equipment was the proper valuation for purposes of the cramdown sought in their Plan. In this Plan, the chapter 13 debtors’ sought to assume the ground lease, retain the mobile home, and cramdown the secured creditor’s claim to value the of the mobile home as determined in the NADA Retail Value Guidebook for Manufactured and Mobile Homes.

The creditor objected based upon an appraisal it had obtained, which valued the mobile home at $80,000 “in place.” The creditor reasoned that since the debtor decided to assume the underlying ground lease and use the mobile home as a residence, the creditor was entitled to a higher figure – the true value of the living accommodation if sold as it stood. Comps in the creditor’s appraisal had relied upon the location of comparable mobile homes in order to establish value.…

Continue Reading Mobile Home Valuations – For Once Location Doesn’t Matter

In the last few days, hundreds of bankruptcy complaints against trade creditors were filed by bankrupt Chapter 11 debtor RadioShack. The crux of the complaints concern “preferences” requesting the return of money received from bankrupt debtors prior to the bankruptcy filing for goods or services sold. However, before you or your business start writing a check to return hard earned money, you should know that you may have defenses that can be asserted.

What is Preference?

To start, a preference is a payment received from a debtor, made within 90 days of the bankruptcy filing. Bankruptcy Code section 547(b) allows a bankruptcy trustee or debtor-in-possession (in this instance, RadioShack) to avoid these payments if the transfers were to or for the benefit of a creditor on account of an antecedent debt but while the debtor was insolvent (unable to pay the debts owed).

When Congress enacted the Bankruptcy Code, the policy behind preferences was to level the playing field for all creditors by not allowing a creditor to receive more than it would have within the debtor’s bankruptcy case.
Continue Reading Trade Creditors Protect Yourselves: RadioShack Filing Bankruptcy Preference Complaints

Recently, several shopping center retail stores have filed for Chapter 11 bankruptcy protection in the District of Delaware. Wet Seal, Inc. (“Wet Seal”) filed on Friday, January 16, 2015 (docket # 15-10081), Cache, Inc. (“Cache”) filed on February, 4, 2015 (docket #15-10172), and most recently, RadioShack Corporation (“RadioShack”) filed on February 5, 2015 (docket #15-1097).…