Recent Bankruptcy Court Decision Reconciles Central Tenets of Commercial Real Estate Financing and Bankruptcy Law

Until now, the “bankruptcy remote” attributes of CMBS borrowers have remained largely untested. However, the bankruptcy court overseeing the chapter 11 cases of General Growth Properties, Inc. and certain affiliated entities last week issued a 47-page opinion squarely addressing the ability of nominally “bankruptcy remote” CMBS borrowers and other SPEs to obtain bankruptcy relief.