Author: Benjamin J. Smith

Is a commercial tenant’s leasehold interest protected when the property is sold in a bankruptcy trustee’s sale?

In the Matter of Spanish Peaks Holdings II, LLC Facts: A commercial landlord and a tenant enter into a long-term lease. The landlord later files for bankruptcy. The bankruptcy trustee sells the property to a buyer in a bankruptcy trustee’s sale, stating it is free and clear of the tenant’s lease encumbering the property. The bankruptcy trustee does not formally reject the terms of the tenant’s lease. Claim:  The tenant seeks to retain possession of the property, claiming they have a right to do so since federal bankruptcy law protects a tenant’s leasehold interest in a property after a bankruptcy. Counterclaim:...

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Is a lender who forecloses on a leasehold estate required to honor the lease agreement as the tenant’s successor-in-interest?

BRE DDR BR Whittwood CA LLC v. Farmers & Merchants Bank of Long Beach Facts: A landlord and tenant enter into a long-term commercial lease. The lease terms state the tenant may encumber their leasehold interest with a mortgage, designating the lender as the successor-in-interest and obligating the lender to perform under the lease. The tenant obtains a mortgage secured by their leasehold estate, then defaults. The lender forecloses on its interest and takes possession of the property. At the landlord’s request, the lender confirms it is the tenant’s successor-in-interest. Prior to expiration of the lease, the lender stops...

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Will an increase in income inequality between the wealthiest and the poorest lead to falling real estate prices in California?

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