Wednesday, March 06, 2013

Another Case Where a Rent Stabilized Lease was sold by a Bankruptcy Trustee

In re Mary Veronica Santiago-Monteverde No. 11-15494 (JMP) SDNY April 10, 2012,  is another case where a bankruptcy judge in the Southern District of New York held that a bankruptcy trustee was allowed to sell a debtor's rent stabilized lease to her landlord. Ms. Mary Veronica Santiago-Monteverde  lived in the East Village, in New York and after she filed for chapter 7 bankruptcy, her landlord, East 7th Street Development Corp. made an offer to the Bankruptcy Trustee to purchase her interest in the lease. The bankruptcy trustee agreed to sell the lease and the Debtor objected to the sale holding that she was entitled to exempt the value of her rent stabilized lease as a "public assistance benefit" within the meaning of section 282(2) of the New York Debtor and Creditor law. In New York, exempt property in a bankruptcy case is governed by New York State Debtor Creditor law. The bankruptcy judge rejected Ms. Santiago-Monteverde's argument and the rent stabilized lease was sold to the landlord. The bankruptcy judge in his opinion stated that it is undisputed that a rent-stabilized lease is property of the estate and that the Bankruptcy Trustee may assume or reject any executory contract or unexpired lease of the debtor pursuant to section 365 of the Bankruptcy Code.

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