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Corporate Reorganization Advisory: True Lease or Disguised Financing? |
September 19, 2006
Previously published on December 2004
Recently, the District Court for the Northern District of Illinois handed
down a ruling that significantly impacts airlines, bond underwriters, and bondholders,
as well as the businesses of project finance and real estate development.
In California Statewide Communities Development Authority v. United Air Lines,
Inc., 2004 WL 2609196 (N.D. Ill. Nov. 18, 2004), Judge John W. Darrah
reversed a bankruptcy court decision, holding that the security underlying tax-exempt
bonds sold to finance airport facilities at San Francisco International
Airport amounted to a true lease as opposed to a disguised financing.
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The views expressed in this article are solely the views of the author and not Martindale-Hubbell. This article is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance. |
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