Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
Common Issues In Commercial Property Bankruptcies
As the commercial real estate market undergoes seismic shifts resulting from the rise of online retailing, the COVID-19 pandemic, the growth in work-from-home options for employees and employers, and the continuing evolution of how we do business as a nation, companies may find themselves in situations where their tenant or their landlord has filed for bankruptcy protection. Questions then quickly arise, such as if and how a landlord may evict a bankrupt tenant, whether a bankrupt tenant may remain as a lessee and continue to occupy the premises, and how to measure damages for a landlord in this situation, both before bankruptcy and going forward post-petition. The Bankruptcy Code and related case law address these points.
Under the Bankruptcy Code, a debtor has the right to elect to assume or reject executory contracts, such as unexpired leases for real property. 11 U.S.C. §365. A debtor with operations in multiple locations may, if approved by the Bankruptcy Court, assume leases for locations where the lease is affordable (in the case of a tenant debtor) or profitable (in the case of a landlord debtor), and where it makes business sense to continue the lease. The debtor may reject leases for those locations where that is not the case.
|Commercial Tenant Bankruptcies
Generally, to assume an unexpired lease, the debtor — i.e., a debtor-in-possession (DIP) or Chapter 7 or Chapter 11 Trustee — must cure any default in the lease (such as unpaid rent through the time of lease assumption), or provide adequate assurance that such default will be cured, as well as provide adequate assurance that the tenant will perform its future obligations under the lease. 11 U.S.C. §365(b). Whether "adequate assurance" is provided is determined by the Bankruptcy Court, with guidance on interpreting the broad provisions of the Bankruptcy Code provided mainly by a patchwork of case law.
This premium content is locked for Entertainment Law & Finance subscribers only
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN ENTERTAINMENT LAW.
- Stay current on the latest information, rulings, regulations, and trends
- Includes practical, must-have information on copyrights, royalties, AI, and more
- Tap into expert guidance from top entertainment lawyers and experts
Already a have an account? Sign In Now Log In Now
For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473
Real Property Law
Questions of Fact About Compliance With Mortgage Contingency ClauseMortgagee Who Purchased At Foreclosure Sale Failed to Establish Bona Fide Purchaser StatusSupreme Court Was Premature In Holding That Option Violated Rule Against Perpetuities
Development
Developer’s Taking Claims Survive Motion to DismissDEC Incorrectly Granted Permit to Expand Nonconforming Mining UseMemorandum of Understanding Not Binding on Subsequent Town Board
City of Yes: Housing Opportunity — A Little Bit Of Everything, Everywhere
New York City’s recently adopted City of Yes for Housing Opportunity (CHO) represents the most significant overhaul of residential zoning regulations in decades. The interplay between existing procedures and new provisions will likely generate significant interpretive questions and litigation as developers seek to take advantage of these opportunities.