Lease Termination Fees May Be an Avoidable Preference Under the Bankruptcy Code

Recently, the Eleventh Circuit considered whether future rent under a lease was "debt" for purposes of bankruptcy, and held that a tenant becomes "indebted" to the landlord for all future rental payments for the life of the lease at the moment the lease is executed.

24 minute read October 26, 2010 at 03:28 PM
By
Stephen T. Skaff
Lease Termination Fees May Be an Avoidable Preference Under the Bankruptcy Code

Generally, regardless of what “debt” means in other areas of life and law, it means something a little different under the Bankruptcy Code. That definition becomes important when, as is more common these days, your client, or a party obligated to your client, declares bankruptcy.

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