Who’s SARE-y Now?: No Whole-Business Exceptions

Law360, New York (July 5, 2012, 12:31 PM EDT) -- An important part of structuring real estate transactions relates to maintaining the separate nature of special-purpose real estate entities. In part, this is done to best assure that, in any potential bankruptcy filing, the secured creditors’ rights would be subject to certain provisions of the Bankruptcy Code affecting single asset real estate (SARE) debtors.

Notably, these provisions put SAREs onto a fast-track in bankruptcy and do not allow the debtors to remain in bankruptcy without debt service or prospects of a confirmable Chapter 11 plan. In...
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