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Single Asset Real Estate And Development Projects: The Kara Homes Mistake, Marshall E. Tracht

Articles & Chapters

The Kara Homes decision held that various affiliates of Kara Homes, Inc., each of which owned a separate real estate project, were "single asset real estate" ("SARE'') cases under the Bankruptcy Code's definition. According to the author of this article, the designation as single asset real estate substantially increased the difficulty faced by the debtors in maintaining their reorganization efforts, and has given lenders and their counsel a significant amount of comfort. However, the definition runs against the actual wording of the Bankruptcy Code, the intent underlying the SARE provisions, and the political winds. It should, and may well, be …