How Bankruptcy Affects Payment Stream Assignments

By Stephen Proctor (May 31, 2017, 4:07 PM EDT) -- In a May 2, 2017 decision, the Sixth Circuit decided the fate of a stream of rental payments from the bankrupt owner of a residential complex. (In re: Town Center Flats LLC, No. 16-1812, May 2, 2017, Sixth Circuit Court of Appeals) The case resembled a similar one, far more controversial and with a different result, from 1993. (Octagon Gas Systems Inc. v. Rimmer, 995 F.2nd 948, 10th Circuit Court of Appeals, 1993) The Octagon Gas case roiled the factoring and receivables purchasing industry. Although not referenced in Town Center, it is possible that the discredited Octagon Gas case influenced the...

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