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| vol 14, num 3 | June, 2017 |
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| Bankruptcy Relief Is Unavailable to a SARE Debtor That Leases Space to a Marijuana-Related Business |
| The increasing relaxation of state laws regulating both the medical and recreational use of marijuana has led to a boom in marijuana-related businesses (“MRBs”). Because MRBs are not exempt from economic forces, however, courts are increasingly being confronted with bankruptcy filings by and against MRBs. To date, courts have uniformly held that bankruptcy relief is not available to an MRB because growing and selling marijuana is illegal under federal law — specifically, the Controlled Substances Act of 1970. For this reason, the bankruptcy court in the Arm Ventures case recently held that a single asset real
estate (“SARE”) debtor’s proposed plan, funded through income generated by leasing space to an MRB, could not be confirmed, and, while declining to dismiss the debtor’s case immediately, granted the secured lender’s motion for relief from the automatic stay. |
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| Ninth Circuit BAP Holds Recording of Tax Deed Not a Ministerial Act Excepted from the Automatic Stay |
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In In re RW Meridian LLC, the Ninth Circuit Bankruptcy Appellate Panel considered whether the pre-petition expiration of the Debtor’s right of redemption for unpaid taxes permitted the tax authority to complete a tax sale post-petition without obtaining relief from the stay. The BAP held that the automatic stay applied, voiding the sale.
The timing of the transactions and the language of the California statutes governing tax sales were both crucial to the BAP’s decision. Debtor was the owner of 58.53 acres of unimproved land located in Imperial County, California. Debtor had not paid the property taxes for more than five years and was delinquent in the approximate amount of $167,000.
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| ABI Is Looking for Journal Coordinating Editors to Serve in 2018 |
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The ABI Journal Editorial Board is seeking qualified ABI members to serve in 2018 as coordinating editors. Coordinating editors are responsible for finding authors outside of their firm to cover assigned slots throughout the year.
For more information about the Journal’s guidelines (including column descriptions), check out the Submission Guidelines page at abi.org/abi-journal. If you are interested in this position, send your resume, a brief letter of interest, and a list of preferred columns to ABI Managing Editor Elizabeth A. Stoltz at estoltz@abiworld.org by July 8.
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©2017 American Bankruptcy Institute . All rights reserved.
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