Chapter 8 - § 8.10 SINGLE ASSET REAL ESTATE (SARE)

• Jurisdiction: Colorado

§ 8.10 SINGLE ASSET REAL ESTATE (SARE)

Changes to the Bankruptcy Code in 1994 and 2005 provide that the bankruptcy cases of debtors whose property consists of "single asset real estate" or "SARE" move swiftly through bankruptcy.⁵⁰ SARE debtors are given substantially less leeway in operating in Chapter 11 and in putting forth a plan of reorganization. In fact, the requirements placed on SARE debtors are so onerous that it is the rare Chapter 11 SARE debtor that manages to confirm a Chapter 11 plan. In most SARE cases, the lender and/or other secured creditors are granted relief from the automatic stay to proceed with their state law remedies (typically receivership and foreclosure).

A SARE debtor typically is one that has been unable to negotiate a resolution with its secured lender, and bankruptcy does not create more leverage for a SARE debtor; it merely delays the inevitable.

Bankruptcy Code § 362(d) (3) includes an additional ground for relief from the automatic stay in SARE cases. Relief will be granted unless within 90 days after entry of order for relief or 30 days after the court determines that a debtor is a SARE, whichever is later, the debtor either (1) files a plan of reorganization "that has a reasonable possibility...