Garvin v. Cook Investments NW, SPNWY, LLC

Real estate holding companies go through Chapter 11 bankruptcy, strike a deal that allows them to repay all creditors in full and keep operating. But wait! The United States Trustee objects because one of the companies leases property to a marijuana farm in Washington state, in violation of federal law. Will the debtors’ repayment plan “go up in smoke”? Ninth Circuit: It will not. Federal law prohibits only plans that are proposed by means forbidden by law. Nothing about the way this plan was proposed was illegal.

Tags: 2019, Bankruptcy, Marijuana, Ninth Circuit

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