Short Sale, Lease Option, BK And Recharacterization
I am looking for any case law where the transaction is a short sale where the tenant/buyer is given a lease/option agreement that could be later recharacterized as a disguised loan if the tenant/buyer files bankruptcy.
For example, buyer purchases home in forclosure from seller in a short sale and then lease/options the home back to the seller. The previous homeowner then files bankruptcy after becoming a tenant/buyer and the bankruptcy court recharacterizes the lease/option as a disguised loan.
I have done extensive research of bankrupty court cases across all circuits and states and I have been unable to find any court decisions analyzing this issue. I have been using Loislaw for the research.
Thank you
The versions of this that I have heard do not necessarily involve bankruptcy. The issue is that when you buy and give an option for the seller to repurchase, this may be construed as a usurious loan. You might try looking outside of bankruptcy case law. Let us know what you find. I have been hearing about this for years and am yet to hear of a specific case.
Search under "fraudulent transfer" and "preferential transfer". I suspect there are scenarios similar to yours characterized that way.