Bankruptcy

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7^TH Circuit Court of Appeals

Case Name: Official Committee of Unsecured Creditors of Great Lakes Quick Lube LP v. T.D. Investments I, LLP

Case No.: 15-2093

Officials: POSNER, FLAUM, and WILLIAMS, Circuit Judges.

Focus: Bankruptcy

Termination of leases before declaring bankruptcy raises questions as to validity by creditors – claims they should retain ownership of properties in bankruptcy.

“Another possible explanation for the terminations builds on the fact that Great Lakes may have expected to emerge from bankruptcy as a going concern—Chapter 11 is oriented toward reorganization rather than liquidation. And while the bankruptcy proceeding will not end until this adversary action between Great Lakes’ unsecured creditors and T.D. is resolved, Great Lakes has continued to operate its business, albeit in shrunken form—the number of stores it leased dropped from 107 at the company’s peak to 64 shortly after the bankruptcy. Once reorganized, it would be struggling for survival with its diminished number of stores. Still, a fresh start may be easier for Great Lakes’ management to obtain without its needing to deal with the irritating Theisen.”

Reversed and Remanded

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.