Description
It is unusual for a commercial tenant to file bankruptcy without its commercial landlord (or landlords) having some idea that the tenant is in financial distress. If the tenant seeks pre-petition accommodations, the landlord will need to evaluate and document them both from a business perspective and in light of a potential bankruptcy.
Once the tenant files bankruptcy, the landlord will want to evaluate whether the automatic stay vitiates any pre-petition notices or demands or requires suspending or undoing anything. If the debtor remains in possession, the next goal is to continue getting paid on a current basis. Technically, the debtor is only obligated to pay reasonable market rent, not the amount described in the lease. Disputes can arise if the debtor wants to keep less than the entire leased premises. First day motions and the debtor's DIP financing may have terms that allow the lender to control how the landlord is paid. Landlords can sometimes form alliances with other constituencies in the case to exert greater leverage, but they have to move quickly.
If the lease is assumed, landlords must pay attention to the cure amounts. Special problems arise if there is a default after assumption. If the lease is rejected, counsel need to understand their options if post-petition rents are owed. Calculating rejection damages and applying the statutory cap is not always clear and varies by jurisdiction.
Listen as our esteemed panel discusses strategies and practical tips for representing landlords when a commercial tenant files bankruptcy.
Presented By
Bio for Annie Attorney; loves horses and arguments
This is a bio for Big Boat. Big Boat is an avid reader and unicyclist.
This is a bio for speaker, Roller Coaster. Roller Coaster enjoys walks on the beach and pizza with pineapple.
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This 60-minute webinar is eligible in most states for 1.0 CLE credits.
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Date + Time
- event
- schedule
1:00 p.m. ET./10:00 a.m. PT
I. Complex landlord-tenant arrangements
II. Bankruptcy considerations during pre-petition workout efforts
A. Early lease terminations
B. Assignment of rents enforcement after a default
C. Anticipating preference/avoidable transfer issues
D. General unenforceability of bankruptcy termination provisions
E. General unenforceability of anti-assignment clauses
III. Landlord's considerations after bankruptcy
A. Effect of automatic stay
B. Importance of first day motions and budgets
C. Adequate protection issues
D. Committees: UCC, special committees
E. Fate of security deposits, letters of credit, and personal guarantees
IV. Enforcing post-petition monetary obligations and effect of breach
A. Tenant's deadline to decide whether to assume or reject leases
B. Calculating rejection damages and interpreting the statutory cap
C. Modification of leases
D. Financing issues
E. Classification of unpaid post-petition rent
F. Default after assumption
The panel will review these and other important issues:
- What are a landlord's rights and options if a debtor/tenant fails to timely perform its post-petition lease obligations? How is that claim classified?
- How does bankruptcy affect an assignment of rents?
- Can pre-petition lease terminations be avoided under 547 or 548?
- Which defaults must be cured for a debtor to be permitted to assume?
- What happens where there is a post-petition default?
Related Courses
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Bankruptcy Bad Faith Filings: Proving Cause Exists to Dismiss A Case Under Section 1112(b); Increased Scrutiny
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Chapter 11 Treatment of Executive Compensation and Bonuses
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