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Commercial Lease of a Tenant in Bankruptcy

Did You Know?

A commercial tenant who files bankruptcy must accept or reject the lease within 60 days of the bankruptcy filing? However, in order to accept the lease, the tenant must cure the pre-petition rent arrearage.

Landlord can and should seek possession of the property through the bankruptcy court if the tenant does not pay post-petition rent as it accrues. In addition, rent is an administrative expense that is a priority over most other debts and ongoing expenses of the tenant in bankruptcy.

Although the landlord is constrained by bankruptcy rules, which apply to all creditors, the landlord also has some very powerful rights that it can assert. Since neither the trustee nor the tenant will protect the landlord, these rights must be aggressively asserted by the landlord through Motions to Lift Stay, Claims for Administrative Expenses and other actions