Ninth Circuit OKs Bankruptcy of Real Estate Firm With Pot Ties (1)

The Ninth Circuit approved the Chapter 11 plan of a real estate consortium that leases property to a Washington state marijuana grower despite objections by a federal government watchdog that the plan violates federal drug law.

Federal bankruptcy law “directs courts to look only to the proposal of a plan, not the terms of the plan,” Judge M. Margaret McKeown of the U.S. Court of Appeals for the Ninth Circuit said May 2 in approving the filing by Cook Investments NW.

This is the first time the Ninth Circuit has considered whether bankruptcy law forbids a Chapter 11 plan involving ...