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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Real Property - Finance

Date & Time
  • event Date

    Tuesday, February 20, 2024

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00
CLE
ALL

This CLE webinar will focus upon the drafting and enforcement of assignments of rent in state and bankruptcy courts and how parties to assignments of rent in a commercial mortgage transaction can protect their rights.

Faculty

Scott Lesser
Principal
Miller, Canfield, Paddock And Stone Plc

As a leader on the firm’s highly experienced Commercial Real Estate Workout Team, Mr. Lesser uses his knowledge and expertise to avoid and resolve his clients' concerns before they develop into true issues. He prides himself on guiding his clients and fellow practitioners alike to practical solutions to distressed real estate and finance situations. In pursuing this end, he co-authors the Michigan Chapter on Receiverships for Strategies For and Against Distressed Businesses, co-authors the "Foreclosure of Mortgages and Land Contracts: Receiverships" chapter in the LexisNexis Practice Guide to Michigan Real Estate Litigation, and is a frequent speaker on distressed asset topics. In addition to representing special servicers, financial institutions, private investors and other creditors, Mr. Lesser also leverages his real estate litigation experience to help title insurance companies, receivers, property owners, real estate investors involved in ownership disputes, real estate developers and others work through difficult circumstances.

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A.J. Webb
Partner, Bankruptcy and Restructuring Practice Group Leader
Frost Brown Todd

Mr. Webb counsels companies facing varying degrees of financial uncertainty and distress, working to proactively identify and assess insolvency issues. He represents parties (secured/unsecured creditors, debtors, committees, purchasers, and borrowers) in all phases of bankruptcy and insolvency proceedings, with an emphasis on selling or acquiring distressed assets and assisting parties in restructurings or out-of-court workouts. Additionally, Mr. Webb counsels clients on general corporate and commercial matters and has also prosecuted or defended numerous avoidance actions. He has represented clients throughout the country in debtor, committee, senior secured lender, distressed acquisition, and retail/landlord engagements.

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Deborah A. Reperowitz
Senior Counsel
Stradley Ronon

Ms. Reperowitz is a nationally recognized bankruptcy and commercial litigation attorney and mediator. Debbie has been a partner at “Biglaw” firms and served as senior vice president, chief litigation counsel at CIT Group and general counsel to a financial advisor with an excess of $20 billion under management. Ms. Reperowitz’ bankruptcy and litigation experience is extensive. She has represented virtually all constituents in bankruptcy cases, including pre-petition, DIP and exit lenders, unsecured creditors, investors and asset acquirers. Her practice has been focused upon complex, often high stakes, cases, involving confirmation disputes, fraudulent transfer issues, lien avoidance/priority claims, business torts, breach of contract, fraud, misrepresentation, conversion and class and mass actions. Ms. Reperowitz also has a robust ADR practice, serving as a mediator and arbitrator in business disputes.

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Description

State and federal courts, including bankruptcy courts, have struggled with issues involving the creation of an enforceable assignment of rents and the exercise by a mortgagee, or lender, of its rights to collect and retain rents thereunder. The issues are critical when the mortgagor, or borrower, is the subject of a bankruptcy case.

Over time, two types of assignments of rent have developed. Under a collateral assignment, a security interest in favor of the lender is created and the borrower retains title to the rents and collects rents until a triggering event or action occurs.

Under an absolute assignment, title to the rents or leases passes to the lender at the time the assignment is made and the lender allows the borrower to collect rents, usually pursuant to a license, until a triggering event or action occurs.

Whether the lender or the borrower owns the rents is critical, particularly in the event of a borrower’s bankruptcy, since ownership will control whether the rents are property of a debtor’s estate constituting cash collateral that can be used by the debtor.

The creation and enforcement of assignments of rent is governed by state law (with the overlay of bankruptcy laws such as the automatic stay), and different states have adopted different laws. While the Uniform Assignment of Rents Act was adopted nearly 20 years ago, very few states have adopted it.

Listen as our authoritative panel discusses the enforcement of assignments of rents, including an introduction into various laws, practices and recent caselaw.

Outline

  1. Collateral vs. Absolute Assignments of Rent
    1. A distinction without a difference?
  2. Bankruptcy Considerations for Assignments of Rent
    1. Chapter 11 versus Chapter 7
    2. Property of the Estate and Automatic Stay Issues
    3. Cash Collateral and Cash Management Concerns
    4. Debtor vs. Lender Approaches
  3. Differing State Laws on Assignments of Rent
    1. Importance of State Law
    2. Recent Decisions (including In re Town Center Flats (6th. Cir. 2017))
    3. Conflicts of Law
  4. A Trend Toward Uniformity? The Uniform Assignment of Rents Act
    1. State Adoption
    2. Enforcement Mechanisms
  5. Special Situations & Final Considerations
    1. Receiverships and Assignments for the Benefit of Creditors
    2. Drafting Recommendations & Panel Tips
    3. Trends

Benefits

The panel will review these and other vital issues:

  • What is the significance of an assignment of rents in a commercial mortgage transaction, and why is it sometimes a separate document from the mortgage?
  • How and when is an assignment of rents perfected, and what are the implications for enforcement?
  • What is collateral assignment as opposed to an absolute assignment, and why might a lender prefer one over the other?
  • How does the asset class impact the efficacy of an assignment of rents and the practical viability of enforcement mechanisms?
  • How do pre-petition enforcement efforts affect the borrower's access to property revenues during the pendency of a bankruptcy?