Putting the Brakes on Private Transfer Fee Covenants

This article will discuss private transfer fee covenants, using one popular model as an example. After explaining how a private transfer fee covenant operates, the article will review the background legal principles relevant to its enforceability As this article will argue, sound policy does not justify the enforcement of private transfer fee covenants. The article concludes with a discussion of recent state legislative efforts to invalidate private transfer fee covenants and highlights a new model statute that, if adopted, would declare such covenants void as contrary to public policy

Crystals, Mud, BAPCPA, and the Structure of Bankruptcy Decisionmaking

A critical feature of any legal system is its formal dispute resolution mechanism. From the perspective of a transactions lawyer, the dispute resolution process should be structured to accomplish (or at least contribute positively toward) doctrinal clarity

Are Security Deposits Security Interests ? The Proper Scope of Article 9 and Statutory Interpretation in Consumer Class Actions

Assume that Jane Doe leases an automobile from a General Motors dealer, pursuant to a lease contract under which Jane makes a cash security deposit. Under the lease, the lessor agrees to “refund” the deposit at the conclusion of the lease term in the event that Jane fully performs her obligations under the lease. Is this transaction governed by Article 9--i.e., has the lessor taken a “security interest” in Jane\u27s cash deposit to secure Jane\u27s obligations under the lease agreement

Does a Federal Tax Lien Take Priority over a Mortgagee\u27s Lien on Rents: Bloomfield State Bank v. United States

Few reported cases have addressed the relative priority rights of a mortgage lender and the IRS for rents from real estate. In Bloomfield State Bank v. United States, No. 10-3939, 2011 WL 1773953 (7th Cir. May 11, 2011), Judge Richard Posner provided the first reported federal appellate opinion; under its analysis, State Bank would have priority over the IRS in the above hypothetical for the rents due from both tenants. This article discusses Judge Posner\u27s opinion, both for its result (which the author believes is ultimately the correct result) and how it characterizes background principles of real estate finance law (as it turns out, not entirely correctly). Before getting to the opinion, however, this article begins with a brief primer on federal tax liens

Rethinking Excessive Force

Each year claimants file thousands of section 1983 actions against law enforcement or prison officials. Many of these claimants allege that officials used excessive force against them in violation of their constitutional rights. Despite the large number of excessive force cases in the federal courts, however, the Supreme Court has decided only two excessive force cases brought under section 1983. In Whitley v. Albers, the Court elaborated the appropriate standard for determining whether the shooting of a prisoner violated the eighth amendment. In Tennessee v. Garner, the Court applied the fourth amendment to strike down a Tennessee statute that authorized the use of deadly force to apprehend a nondangerous fleeing suspect. In each case, the Court recognized that the application of force implicated a specific fourth or eighth amendment right and applied the standard developed to protect that right

Thank You, Dale

Often in symposium issues, it is customary for the organizer to prepare a foreword that introduces each author and presents a brief synopsis of each article. As is true for most symposia, the authors in this issue (and their articles) are worthy of such praise and attention. I hope you will read and enjoy each of the articles, but this foreword is not going to summarize or describe them. Instead, with the indulgence of the other authors, this foreword will focus on Dale Whitman - in whose honor these articles were prepared and presented at the University of Missouri-Columbia School of Law on April 13 and 14, 2007

Of Hotel Revenues, Rents, and Formalism in the Bankruptcy Courts: Implications for Reforming Commercial Real Estate Finance

This article is intended to continue the dialogue begun by the proposed Restatement and has two distinct goals in this effort. Parts I through III argue that the position of the Restatement drafters is both legally and functionally sound and that bankruptcy courts should embrace and apply the proposed Restatement in administering distressed real estate developments. Part I reviews the reasoning articulated in the hotel bankruptcy cases, demonstrating how courts have applied the provisions of the Bankruptcy Code and state law in a formalistic manner to extinguish the hotel mortgagee\u27s lien upon postpetition room revenues. Part II rejects the analysis of the hotel bankruptcy cases on legal grounds. Although the drafters of the proposed Restatement appear to base their recommendations purely upon the functional similarity of rents and hotel room revenues, bankruptcy courts properly may characterize hotel room revenues as “rent” in the nature of real property. The notion that a licensee may pay “rent” in exchange for its constituent rights respecting the land is consistent with the original common law scope of the term “rent,” as well as the nature and scope of the term within the civil law tradition. Part III then criticizes the hotel bankruptcy cases on policy grounds, demonstrating that financial and economic realities do not justify distinguishing between real estate projects based solely upon the status of the occupier as a tenant rather than a licensee. To the developer and the mortgagee, the occupancy revenues generated by the apartment and the hotel are economically identical. Accordingly, sound commercial policy dictates that security law should treat hotel mortgagees with liens upon hotel room revenues no differently than apartment mortgagees holding liens upon rents