Riddell Williams: “Given the disconnect between federal law and that of an increasing number of states, marijuana-related businesses and their landlords, vendors, and lenders are confronted with dicey legal issues. The availability of bankruptcy relief is one of the latest. A bankruptcy court was recently asked to decide whether it could (or should) enter an involuntary order of relief against a medical marijuana dispensary management entity, even though the debtor-entity’s business activities are illegal under federal law. In re Medpoint Management, LLC, 528 B.R. 178, 182 (Bankr. D. Az.). The court answered in the negative, consistent with earlier cases barring bankruptcy relief for debtors engaged in the marijuana business or in leasing to marijuana businesses. . . . Under Arenas, individual debtors engaged in the marijuana business should be aware that the bankruptcy discharge is probably not available to them. Debtors who simply lease space to marijuana businesses can expect to be barred from obtaining relief under the Bankruptcy Code under Rent-Rite. Under Medpoint, anyone considering extending loans or trade credit to marijuana businesses should proceed with the utmost caution and cannot count on seeking a remedy in bankruptcy court if a marijuana business fails to pay.
Be Not a Borrower or a Lender…of a Marijuana Business
By On the Net|2017-02-04T07:38:57-07:00May 1st, 2015|AZ Marijuana Law Lawsuits, Stories & Articles|Comments Off on Be Not a Borrower or a Lender…of a Marijuana Business
About the Author: On the Net
The author of this article is
Richard Keyt, an Arizona business law attorney who is the creator of this Arizona medical marijuana law website. Connect with Richard at 480-664-7478 or on Google+