No Equity + No Other Assets = No Attorneys’ Fees?!
February 3, 2011, 12:12 PM EST
Law360, New York (February 3, 2011, 12:12 PM EST) -- The scenario has been all too common in recent years. A corporate Chapter 11 debtor owns as its only asset(s) one or more commercial real estate buildings. The building is worth less than the mortgage encumbering it, and the debtor’s only income is rents. Upon its bankruptcy filing, the debtor wants to use the rents to pay administrative expenses — unrelated to the maintenance of the property — such as professionals’ fees.
Assuming that the debtor can overcome its assignment of rents to its secured lender...