In this part three of our discussion of the foreclosure process on commercial real estate in Louisiana, we are detailing the procedures involved in ordinary process foreclosures in Louisiana. Foreclosing on collateral by ordinary process in Louisiana involves filing a civil suit against the mortgagor asking the court to recognize that the indebtedness is due
With the revamp of the residential short-term rental regulations passed recently, the New Orleans City Council has turned its attention to commercial short-term rental (“CSTR”) regulations. The City Council has asked the City Planning Commission (“CPC”) to study the regulations to determine the overall impact of CSTRs on the City’s neighborhoods. In particular, the CPC
On February 2, 2023, the New Orleans City Council adopted an ordinance modeled after that of the City of Baltimore, Maryland, wherein properties found to be “chronic public nuisances” may be prohibited from holding occupational licenses for a period of up to two years. The ordinance does not apply to residential properties. The so called
In response to a court ruling finding that New Orleans’ requirement that the holder of a residential short-term rental (“RSTR”) license hold a homestead exemption violated the Constitution’s Commerce Clause, the New Orleans City Planning Commission is making recommendations for changes to the RSTR regulations. In particular, on January 27, 2023, the City Planning Commission
This year’s U.S. Open has brought its fair share of excitement on the court. The sport’s beloved Serena Williams, who was just two matches away from being only the fourth female to complete a calendar grand slam, was eliminated by an unranked Italian player, and an potential showdown between tennis’ rock stars Novak Djokovic and
We’ve all been there. You sit on the Board of a local non-profit organization as the token lawyer. Or, you volunteered to assist with your house of worship’s finance committee because you have some practice experience with banks. Inevitably the scenario comes up: “You’re a lawyer. Will you help us buy that little piece of
The American Jobs Creation Act of 2004 amended the New Markets Tax Credit program (“NMTC”) to provide that certain targeted populations may be treated as low-income communities. The Internal Revenue Service provided some guidance on the topic in Notice 2006-60 and in proposed regulations that were issued in 2008. Following a lengthy comment period, final
Last week, the United States Department of the Treasury announced the approval of applications from Louisiana and a handful of other states for State Small Business Credit Initiative (“SSBCI”) funding. The SSBCI is an important component of the Small Business Jobs Act (“the Act”) that was signed into law last fall. This funding is intended
A recent opinion from the United States Bankruptcy Court in Baton Rouge, Louisiana shows that even experienced lenders and developers may not always understand how Louisiana’s Private Works Act applies to their project, and how much leverage a properly filed notice of contract can provide to a general contractor. Tuscany Reserve, LLC (“LLC”) was formed by sophisticated developers for the purpose of developing a new apartment complex in Baton Rouge. LLC obtained acquisition and construction financing from a bank (1st Bank), which properly recorded its mortgage on the project before work commenced. LLC hired “Contractor” to build the complex; Contractor recorded its notice of contract in the parish mortgage records. As often happens, a dispute developed between LLC and Contractor regarding the work performed and lack of payment. Contractor stopped work and filed a lien on the property under the Louisiana Private Works Act for $1.17 million. Contractor eventually agreed to cancel its lien in exchange for a promissory note and guarantees from LLC’s principals and collateral provided by an LLC affiliate. Once the lien was cancelled, 1st Bank funded two draw requests on the construction loan. LLC needed more money for the project and turned to a new lender (2nd Bank) for additional financing. 2nd Bank secured its loan with a collateral mortgage on the immovable property for the project; there were no liens in the property records when 2nd Bank recorded its mortgage. The relationship between LLC and Contractor soon soured, again, and Contractor filed two liens on the project, one for the original claim amount, plus interest, and another for $250,000.00. Contractor sued LLC and its principals on the matured promissory note, and also sued LLC based on its rights under the recorded construction contract and the Louisiana Private Works Act. LLC eventually filed for chapter 11 bankruptcy in the Middle District of Louisiana.
Continue Reading Lenders and Developers Need to Understand How Louisiana’s Private Works Act Applies to Their Projects
In today’s distressed retail market, the possibility of a tenant’s bankruptcy is a top concern for managers and owners of retail centers. Owners of commercial office buildings in many parts of the country are becoming increasingly concerned about tenant bankruptcies, too. Landlords need to know the options available when a tenant files for bankruptcy and should anticipate a tenant/debtor’s likely maneuvers in bankruptcy. This article provides a summary of relevant law and key strategic considerations to help landlords minimize losses and protect their interests when a tenant files bankruptcy.
Leases & “Executory Contracts”
Section 365 of the Bankruptcy Code allows a debtor (i.e., an entity that has filed for bankruptcy) to either assume or reject an executory contract or unexpired lease. This way, a debtor may decide to assume any valuable contracts and reject any burdensome ones. If a bankruptcy tenant decides to assume an unexpired lease, the lease will remain in effect through and after completion of a Chapter 11 reorganization. Assuming the lease does not mean the tenant gets to stay in the space free of charge. The tenant must cure any outstanding defaults and perform all pending obligations in the lease.Continue Reading Preparing for a Tenant’s Bankruptcy – the Landlord’s Perspective