Rent Deferments Challenge Landlords' Statutory Protections in Chapter 11
Beginning with Pier 1 and Modell's, some bankruptcy courts in retail Chapter 11 cases have been allowing debtors to suspend post-petition rent payments to their landlords, in contravention of the generally-accepted practice that such payments must continue to be made. Given the $3 trillion commercial mortgage market, this issue is of critical importance to landlords and banks.
September 18, 2020 at 03:04 PM
8 minute read
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Beginning in late March with In re Modell's Sporting Goods, Inc., No. 20-14179 (Bankr. D.N.J.), some bankruptcy courts in retail Chapter 11 cases have been allowing debtors to suspend post-petition rent payments to their landlords, in contravention of the long-accepted practice, based on Bankruptcy Code Section 365(d)(3), that such payments must continue to be made as they come due in the ordinary course of business.
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