Financial Poise: Ethical Issues in Real Estate-Based Bankruptcies

February 21, 2024
Mark Silverman will participate in the Financial Poise: Ethical Issues in Real Estate-Based Bankruptcies 2024 webinar series. Mark will discuss Insider Lease Agreements on Wednesday, February 21, 2024 at 11am CT.

It is a common play in real estate to create a separate operating entity to serve as a tenant and execute a lease between the owner of the property and himself. Typically, this happens in assets which serve as a real estate-based business, such as a retail property. The structure enables the operator to reduce the taxable income of the business and also provide a liability shield for the property owner. However, this arrangement can easily lead to some ethical issues, should the property owner become distressed.

Where is the line between a savvy real estate strategy and unethical behavior? This webinar presents practice pointers on how to use the ABA Model Rules as a guide to navigating ethical issues in Insider Lease Agreements through dynamic case studies that explore how different fact patterns can change the assessment of a situation. Model Rules addressed include those that govern the client-lawyer relationship (Rule 1.7: Conflict of Interest: Current Clients); those that speak to the need for candor toward the tribunal and fairness to an opposing party and counsel (Rule 3.3 through 3.4); and the necessity for truthfulness in statements to others and issues surrounding unrepresented persons (i.e. Rule 4.3).