BarbriSFCourseDetails

Course Details

This CLE course will present suggested approaches for commercial real estate debtors and senior mortgage lenders to deal with single asset real estate (SARE) entities. Single asset real estate is defined in the Bankruptcy Code as a single property or project that generates substantially all of the debtor’s gross income (§ 101(51B), Bankruptcy Code). A SARE typically includes the following types of properties: Shopping centers, Office buildings, Apartment Buildings and Industrial and warehouses.

The program will look at the SARE requirements, meaning of a non-insider impaired accepting class and analyze the per-plan vs. per-debtor approaches under Sec. 1129, as well as fights over rights in rents and insurance proceeds.

Faculty

Description

SARE debtors must file a plan that has a reasonable possibility of being confirmed or risk lifting the automatic stay in favor of the secured lender. In addition, approval of a cramdown plan by a SARE entity requires that at least one class of "impaired" creditors, excluding “insiders,” votes to accept the plan. Practitioners representing clients in SARE bankruptcies must navigate the SARE rules and the impaired creditor rules and keep abreast of the evolving case law developments impacting plan cramdown. The SARE debtor does not need to demonstrate that its plan will actually be confirmed and is not required to present the same level of evidence that is required at a confirmation hearing. It must produce enough evidence at a hearing to lift the automatic stay that there is a reasonable possibility to confirm the plan in a reasonable period of time. See, In re Bonner Mall P’ship, 2 F. 3d 899 (9th Cir. 1993); In re Trigee Found., Inc., 2013 WL 1401889 (Bankr. D.D.C. Apr. 8, 2013)).

Increasingly disputes are centered around rights in related collateral, such as rents and insurance proceeds, whether creditors are “insiders,” and artificial impairment.

Listen as our authoritative panel of bankruptcy attorneys guides you through the morass of complexities facing debtors and senior mortgage lenders in plan cramdown involving SAREs.

Outline

  1. Overview of SARE and plan cramdown rules
  2. Impaired accepting class
  3. Per-plan vs. per-debtor approaches
  4. Perspectives for the secured mortgage lenders
  5. Perspectives for the debtor/borrower

Benefits

The panel will review these and other key issues:

  • What hurdles do the SARE rules impose for real estate debtors?
  • How do the SARE rules impact the viability of Chapter 11 as a restructuring strategy?
  • How does the application of the per-plan or per-debtor approach impact the secured lender's ability to look only to their specific borrower for repayment of the loan?