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Course Details

Course Information
  • smart_display Format

    Live Online with Live Q&A

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Real Property - Finance

Date & Time
  • event Date

    Tuesday, July 8, 2025

  • 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 discuss the different approaches that state and bankruptcy courts have taken to the exercise of assignment of rent remedies and how those approaches should inform the drafting of an assignment of rents and lease documents in a commercial mortgage transaction.

Faculty

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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Gary M. Kaplan
Partner, Chair Restructuring, Insolvency and Creditors Rights Practice Group
Farella Braun & Martel LLP

Mr. Kaplan has decades of experience representing debtors, creditors, creditors' committees, trustees, and receivers in a wide range of bankruptcy and nonbankruptcy matters. His practice includes both out of court and Chapter 11 restructurings and advising clients regarding pre- and post-bankruptcy strategy, debt collection, judgment enforcement, and provisional remedies. Mr. Kaplla represents lenders and borrowers in a wide range of financing transactions, including debtor-in-possession financing, as well as lease and guaranty matters. He also has extensive litigation experience in bankruptcy and non-bankruptcy courts, at trial and appellate levels, including in the U.S. Supreme Court. Mr. Kaplan counsels companies and individuals experiencing financial and operational challenges in myriad industries. He helps clients restructure their finances, build and negotiate sustainable workout plans with creditors, and develops other creative solutions to avoid bankruptcy, including refinancings, divestitures, joint ventures, and licensing deals. Mr. Kaplan also represents both secured and unsecured creditors, creditors’ committees, landlords, and equity holders in creative recovery solutions in and outside of bankruptcy. He has proved adept at protecting landlord’s rights in retailer bankruptcy cases nationwide through negotiation and litigation when necessary. He has extensive experience in insolvency-related litigation, including preference and fraudulent transfer claims, as well as defending guarantors, owners, directors and officers.

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Description

State and federal courts (including bankruptcy courts) have struggled with actions that a mortgagee can take when holding a recorded assignment of rents to obtain title to the rents and directly collect them to the exclusion of the mortgagor. The issue is critical if a bankruptcy proceeding has been filed by or against the mortgagor.

Under the Bankruptcy Code, "perfection" of a mortgagee's interest in rental income occurs at the time of recordation of the mortgagee's assignment-of-rents document. But, an unresolved issue is what additional steps the mortgagee must take to "activate" or "enforce" its contractual right to the rents upon a default by the mortgagor.

Different rent assignments have developed in response to state and bankruptcy case law. A collateral assignment of rents allows the borrower to collect rents until the lender, upon default, takes some affirmative action, such as appointing a receiver or demanding rents from the borrower or tenants. Under an absolute assignment, the borrower may collect rents based on a license from the lender, but the lender's right to collect rents is triggered immediately upon the borrower's default. The distinction is critically important at the default and foreclosure stages and in bankruptcy.

Listen as our authoritative panel discusses the enforcement of the assignment of rents and leases after a commercial mortgage default.

Outline

I. General purpose of assignment of rents: security (or immediate) interest in rents

II. How the mortgagee generally exercises remedies

A. Taking possession of a property

B. Receivership

C. Notice to tenants

III. Differing state requirements for enforcement: Uniform Assignment of Rents Act

IV. Collection issues in bankruptcy

V. Significance of collateral vs. absolute assignment

VI. Key takeaways for drafting and assignment of leases and rents

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 often a separate document from the mortgage?
  • How is an assignment of rents perfected, and what issues can arise in enforcement?
  • What is collateral assignment as opposed to an absolute assignment, and why would a lender prefer the latter?
  • How does the borrower's bankruptcy affect the lender's ability to enforce an assignment of rents?