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More Clubs File for Bankruptcy as Refundable Membership Deposit Structures Nosedive

As refundable membership deposit structure has tumbled in popularity, many membership deposit clubs find themselves filing for bankruptcy in an effort to restructure their liabilities. Before the economic downturn, refundable membership deposit structures were the preferred method of financing for clubs. A club would charge a membership deposit to join the club, which would be repaid in thirty years or after the member’s resignation from the club or death. In order for the structure to work, new members would have to join so that resigning members could receive their repayments. However, as resigning members began to outnumber new members, many outgoing members had to wait longer for their refunds. In 2007, membership market prices fell further, affecting the market for club properties.

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Categories: Bankruptcy & Creditors’ Rights
Tags: Chapter 7 BankruptcyChapter 11 BankruptcyJoshua D. KrutAleida Martinez MolinaChapter 13 BankruptcyFort Lauderdale Bankruptcy AttorneysMiami Bankruptcy AttorneysSouth Florida Bankruptcy AttorneysChapter 9 Bankruptcy
Author(s): Brooke P. Dolara

Supreme Court Decision Protects Creditors’ Right to Credit-Bid on Own Collateral

In 2007, RadLAX Gateway Hotel, LLC purchased the Radisson Hotel at Los Angeles Airport and neighboring properties with the objective to renovate the hotel and construct a new parking structure. During the financial crisis of 2008, RadLAX ran out of funds and stopped construction on the project. RadLAX filed for Chapter 11 bankruptcy protection in 2009, and proposed a plan to sell substantially all of its property at auction and using the proceeds to pay the bank. RadLax sought to bar its creditors from bidding on the property using the debt it was owed to offset the purchase price, a practice known as “credit bidding.” The Bankruptcy Court denied the debtor’s request, because the auction procedure did not comply with the federal Bankruptcy Code’s requirements. Specifically, because the proposed plan was rejected by a class of creditors, it was a “cramdown” plan, under which certain applicable standards must be met for confirmation by a Bankruptcy Court. The Seventh Circuit affirmed, holding that the debtors could not sell encumbered assets free of any liens without allowing the creditors to credit-bid. RadLAX appealed to the Supreme Court.

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Categories: Bankruptcy & Creditors’ RightsFederal LawFederal Courts
Tags: Chapter 11 BankruptcyAleida Martinez MolinaFort Lauderdale Bankruptcy AttorneysMiami Bankruptcy AttorneysSouth Florida Bankruptcy Attorneys
Author(s): Brooke P. Dolara

Government Officials Reach $26 Billion Settlement with Major Banks to Bring Relief to Homeowners

Federal and state officials have reached a $26 billion foreclosure settlement with Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, and Ally Financial, five of the nation’s largest banks. The settlement is the largest deal reached to alleviate the damage caused by the housing market crash, and could provide relief to nearly two million current and former homeowners affected by the crash.

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Categories: LitigationClass ActionsAlternative Dispute Resolution
Tags: CollectionsChapter 7 BankruptcyChapter 11 BankruptcyJamie A. ColeEdward G. GuedesMichael S. PopokJoseph H. SerotaDamagesFort Lauderdale Business Litigation AttorneysFort Lauderdale Business Litigation LawyersMiami Commercial Litigation AttorneyMiami Commercial Litigation LawyerSouth Florida Commercial Litigation AttorneySouth Florida Commercial Litigation LawyerSouth Florida Business Dispute Litigation AttorneysSouth Florida Business Dispute Litigation LawyersSouth Florida Private Transactions AttorneysSouth Florida Private Transactions LawyersFort Lauderdale Private Transactions AttorneysMiami Private Transactions AttorneysMatthew H. MandelFort Lauderdale Real Estate AttorneysMiami Real Estate AttorneysSouth Florida Real Estate AttorneysFort Lauderdale LitigatorsMiami LitigatorsSouth Florida LitigatorsAlternative Dispute Resolution
Author(s): Brooke P. Dolara

Condo Owner Files Bankruptcy...Collection Efforts End? Not Necessarily...

Most well-informed Florida condominium and homeowners' association boards know that the filing of a petition in bankruptcy court by a unit owner halts direct collection efforts. What most boards do not understand, however, is that the mere filing of a Chapter 7 or Chapter 11 petition does not discharge that debtor's post-bankruptcy filing obligations to the association – even when the debtor "surrenders" the property in the bankruptcy or otherwise moves out of the subject unit.

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Categories: LitigationCondominium AssociationsBankruptcy & Creditors’ RightsHomeowners' Associations
Tags: Automatic StayCollectionsChapter 7 BankruptcyChapter 11 BankruptcyCondos and HOAsJoshua D. KrutAleida Martinez MolinaFort Lauderdale Business Litigation AttorneysFort Lauderdale Business Litigation LawyersMiami Commercial Litigation AttorneyMiami Commercial Litigation LawyerSouth Florida Commercial Litigation AttorneySouth Florida Commercial Litigation LawyerFort Lauderdale Condominium Association AttorneysMiami Condominium Association AttorneysSouth Florida Condominium Association AttorneysFort Lauderdale Homeowners' Association AttorneysMiami Homeowners' Association AttorneysSouth Florida Homeowners' Association AttorneysFort Lauderdale LitigatorsMiami LitigatorsSouth Florida LitigatorsFlorida Commercial Litigation LawyerFlorida Litigation AttorneysFort Lauderdale Civil Litigation AttorneysFort Lauderdale Commercial Litigation AttorneysFort Lauderdale Commercial Litigation AttorneysMiami Commercial Litigation AttorneyMiami Litigation Attorney
Author(s): Aleida Martínez Molina