State Court Foreclosure Receiver Required to Return Possession of Real Property to Chapter 11 Debtor

Chair emeritus and finance and restructuring partner Andrew Kassner and counsel Joseph Argentina coauthored an article for The Legal Intelligencer titled “State Court Foreclosure Receiver Required to Return Possession of Real Property to Chapter 11 Debtor.”

The article discusses the Bankruptcy Code requirement that upon filing a bankruptcy case, the receiver must give back possession of the mortgaged property to the debtor unless the lender obtains an order from the United States Bankruptcy Court excusing the receiver from this requirement. The issue was recently addressed in In re Novus Structures,Case No. 23 B 6723 in the U.S. Bankruptcy Court for the Northern District of Illinois.

Kassner and Argentina provide an overview of the case and the court’s opinion and holding. The authors note that this is a reminder to practitioners that being successful in satisfying the state law standard for the appointment of a receiver or enforcing the contractual right to appointment of a receiver under state law does not assure that the receiver will be allowed to stay in place if a bankruptcy case is filed.

The full article is available for The Legal Intelligencer subscribers.