A tenant may not have to pay full rent for the month it went into bankruptcy, even though it continues to use the leased property. A recent case involved bankrupt tenants under numerous unexpired non-residential leases in which the annual rent was payable monthly in advance. This issue was analyzed by bankruptcy Judge Mary F. Walrath in the case of In Re: HQ Global Holdings Inc., et al., Bankruptcy Ct. for Dist. of Del., Chapt. 11, Case No. 02-10760 (MFW) (Aug. 2, 2002).
After the bankruptcy was filed on March 13, 2002, several landlords petitioned for immediate payment of rent for the post-filing portion of the March rent. This was designated by the court as the “stub-rent,” and the court denied those motions and deferred the payment of the stub-rent until after the debtors have determined whether to assume or reject the landlords’ leases.
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