Lender Liability

No Administrative Claim For Hotel Damaged By Methane from Bankrupt Landfill Operator

It seems like there were a lot of cases in 2011 involving commercial properties impacted by methane gas from former landfills. A recent case involved a novel question if the owner of a hotel damaged by methane gas migrating from a landfill could seek administrative claim status in a chapter 7 bankruptcy case. In the …

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A Lawyer, an Underwriter and an Appraisor-An Update

The title of this post sounds like a teaser to a bad joke but unfortunately it refers to the latest round of motions in two sprawling lawsuits involving a defunct planned community that was to be developed on what proved to be a part of a world war 2 bombing practice range. The defendants include …

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Why Property Owners Should Consult Lawyers Before Signing Gas Leases

We have been sharing and commenting on articles discussing how lenders are becoming increasingly concerned about borrowers who lease their property to allow hydraulic fracturing (“fracking”). The operations permitted by the leases on what is typically rural or agricultural land include storage of hazardous substances and wastewater that likely would constitute defaults under the mortgages. …

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CMBS Lender Kept In Case Over Questions About Environmental Disclosure

The federal district court for the Southern District of New York denied a motion to dismiss filed by Morgan Stanley Mortgage Capital, Inc (MSMC)that it failed to adequately disclose environmental conditions at a shopping center and should not be required to buy back the $81MM loan. This case has some yummy nuggets. In this case, …

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State Appeals Court Affirms Damage Award Against Bank for Sale of Contaminated Property

A New Jersey Appeals Court refused to disturb a $248,928 damage award against a bank involving a sale of contaminated property. The plaintiff had argued that the trial court had erred in calculating the damages flowing from the bank’s breach of contract. In Ritschel v. Spencer Savings Bank,SLA, 2011 N.J. Super. Unpub. LEXIS 1257 (May 16, 2011), …

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