In his latest article for The Bankruptcy Strategist, titled “Key Win Likely for Commercial Shopping Center Lessor in Second Circuit,” Schulte Roth & Zabel of counsel Michael L. Cook discusses the aftermath of the US Supreme Court’s earlier rejection of the Second Circuit’s jurisdictional holding in In re Sears Holding Corp. 

The US Court of Appeals for the Second Circuit, on remand from the Supreme Court, further remanded to the district court the key issue of whether the Chapter 11 debtor gave “adequate assurance of future performance of” a commercial real property shopping center lease “as required by [Bankruptcy Code] §365(b)(3)(A),” after the debtor’s assignment of its lease to Transform Holdco LLC (T). In re Sears Holding Corp., 2023 WL 7294833 (2d Cir. Nov. 6, 2023). MOAC Mall Holdings LLC (M), the shopping center lessor, had objected to the lease assignment because the assignee had not met the Code’s financial condition requirement; lost in the bankruptcy court; initially prevailed in the district court on appeal; but lost again in that court and in the Court of Appeals on jurisdictional grounds. The Supreme Court, however, rejected the Second Circuit’s jurisdictional holding and remanded for a review of the merits of M’s appeal. MOAC Holdings LLC v. Transform Holdco LLC, 143 S. Ct. 927, 933 (2023) (“ …§363(m) is not a jurisdictional provision.”). Based on the Second Circuit’s analysis, M will likely prevail in the lower court, giving commercial lessors increased leverage in reorganization cases. 

Schulte partner and Investment Management Group co-head Stephanie Breslow was recently interviewed by CoinGeek reporter James Field to discuss the “state of US digital asset regulation in 2023 and the crucial court cases shaping it.”  

Stephanie stated, “Our legislative process is at an impasse; nothing is getting passed. The House and Senate oppose each other, there’s an inability to move on anything in actual crypto regulation, and I don’t think that will change, certainly not before the election, which leaves us with the regulatory environment that we have.”  

She added, “There’s a bit of a turf struggle there because the obvious question, ‘which cryptos are securities?’ lurks, and if they are securities, then they need to be privately placed or resold under Rule 144 after a year, and they need to be sold on exchanges that either are not open to US people and are being operated offshore or are open to US people but are only selling cryptos that aren’t securities.” 

Stephanie also discussed how the SEC’s cases against Binance and Coinbase will shape the future of the digital asset space in the US. Despite the uncertainty in Congress, she is optimistic about the future of the digital asset industry due to the value and utility the sector offers to investors and consumers.  

Read more here. 

Schulte partners Peter Greene and Ben Kozinn, and special counsel Jessica Margolies are featured in Eagle Alpha’s 2023 Alternative Data Report: The Year in Review. In their “Legal Perspectives” section, they examine the three developments that shaped the alternative data world in 2023: the emergence of generative AI, the investigation of Capvision, and vendor diligence processes and procedures. They also provide their outlook for alternative data in 2024.

Download the report here.