Texas High Court Backs 3rd-Party Property Contracts

Law360, New York (April 1, 2011, 5:58 PM EDT) -- Texas' top court said Friday that investment company Basic Capital Management Inc. can enforce $160 million in real estate loan financing contracts handled through special-purpose subsidiaries.

Reversing decisions of two lower courts, the Supreme Court of Texas ruled that Basic was a third-party beneficiary of Dynex Commercial Inc. loans intended for SABREs — single-asset, bankruptcy-remote entities.

SABREs typically own only one piece of real estate and are independent of their affiliates, a feature that makes it easier for real estate lenders to recover their money if...
To view the full article, register now.