Getting Out of Commercial Leases
A discussion of on how commercial tenants can get out of their (above market) leases, and reorganize and get rid of their landlord's claims, under a new section of the Bankruptcy Code.
March 28, 2023 at 10:00 AM
4 minute read
Landlord Tenant Law
Commercial office vacancies have skyrocketed and rents have plummeted. Tenants, required to examine their space requirements post-pandemic, are also figuring out how to take advantage of the lower rents. A recent addition to the Bankruptcy Code provides a potential answer.
Legal commentators have long lamented that Chapter 11′s high costs and complexities make it too difficult for small businesses to successfully reorganize. In response to these concerns, Congress recently passed amendments to the Bankruptcy Code known as the Small Business Reorganization Act (SBRA).
Before SBRA, businesses considering bankruptcy had two options: Chapter 7 or Chapter 11. Upon the filing of a Chapter 7 case, a bankruptcy estate is created that is comprised of the debtor's nonexempt property.
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