Among the only certainties for the post-COVID lending world is the uncertainty of commercial real estate values.  Among the classes of real estate that surely will be immediately diminished in value are hospitality and most brick and mortar retail, but even the value of industrial and office properties will be closely scrutinized as questions are posed regarding changes in how companies conduct their businesses and which types of businesses will recover most fully.  Ignoring the obvious challenges faced by hotels, stores, movie theaters and restaurants, will office buildings ever re-fill with white collar workers after they have demonstrated an ability to work remotely?  Which factories will spring back to full productivity, and how will the demand for work space change?  And most fundamentally to real estate lenders and investors, what will happen to rental and sale values in the face of this uncertainty?  These questions will have an immediate impact on the Chapter 11 process and will provide opportunities for business debtors to drastically reduce and modify liabilities secured by real estate.  Real estate lenders in turn may have to resort to the often-misunderstood provisions of the Bankruptcy Code found in Section 1111(b) dealing with under-secured real estate loans.   
Continue Reading Election Time: Bankruptcy Code 1111(B) in the Post-COVID World