Nonrecourse Claimants Have A Claim In Bankruptcy

Law360, New York (December 11, 2013, 3:46 PM EST) -- In the matter of B.R. Brookfield Commons No. 1 LLC, the Seventh Circuit recently confirmed that Bankruptcy Code Section 1111(b)(a)(A) treats an otherwise nonrecourse loan as a recourse loan in bankruptcy, regardless of whether there is any equity in the property securing that loan, and the lender is entitled to a claim in bankruptcy.[1] Accordingly, Bankruptcy Code Section 1111(b)(1)(A) breaks from the traditional confines of bankruptcy law by telling courts to ignore state law and nonrecourse agreements as a protection to nonrecourse creditors who would otherwise...
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