Absolute Assignment Of Rents: Maybe Yes, Maybe No

Law360, New York (May 13, 2011, 2:22 PM EDT) -- For many years, if not decades, lenders have been trying to persuade courts that the lenders’ rights to rents received by the borrower are not affected by a borrower’s bankruptcy. See In Ventura-Louis Properties, 490 F.2d 1141 (9th Cir. 1994). Some courts have ruled that if the language of the assignment clearly indicates that the parties intended the assignment of the rents to be absolute, then such rents do not become property of the estate. Sovereign Bank v. Schwab, 414 F.3d 450 (3rd Cir. 2005)....
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