Commercial Leases In Economic Distress: Pre- and Post-Bankruptcy Strategies for Landlords

Negotiating Lease Modifications With Distressed Tenants, Participating in the Bankruptcy Process

Recording of a 90-minute premium CLE video webinar with Q&A


Conducted on Thursday, June 3, 2021

Recorded event now available

or call 1-800-926-7926
Course Materials

This CLE course will guide landlord counsel in handling the critical legal issues that arise before and after a tenant files for bankruptcy. The panel will outline commercial landlords' strategies to protect their interests and maximize recovery under state law and the Bankruptcy Code.

Description

The COVID-19 pandemic and related state and local mandates forced retail and other businesses nationwide to close or substantially alter their business practices. PPP and other government aid packages have offered short-term relief, but many companies eventually wind up in bankruptcy. Commercial landlords must prepare now to cope with past-due rents and soaring vacancies and protect their financial interests.

The Bankruptcy Code offers protection to both landlords and tenants but raises several complex legal issues. The tenant's primary concern is the assumption or rejection of the lease under Chapter 11. However, legal advisers must carefully consider the timing and implications of such decisions (including locations impacted).

There are strategies available to the landlord to minimize losses before or after a bankruptcy filing. They may include negotiating a rent abatement or other modification of the lease or participating in the creditor's committee in bankruptcy. It may also have setoff rights concerning deposits held under the lease.

Listen as our authoritative panel of real estate and bankruptcy attorneys highlights critical legal issues that arise for landlords before and after a tenant files for bankruptcy. The panel will offer their perspectives on best practices for commercial landlords to protect their interests and maximize recovery under state law and the Bankruptcy Code.

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Outline

  1. Commercial tenant COVID-19 rent relief agreements and bankruptcy: current trends
  2. Legal issues arising when a commercial tenant files for bankruptcy
    1. Automatic stay
    2. Ipso facto clauses
    3. Assumption or rejection of a lease
    4. Anti-assignment lease provisions
    5. Post-petition performance
    6. Proofs of claim
  3. Best practices for mitigating the risk of loss
    1. Pre-petition rent relief, repossession, or termination of the lease
    2. Enforce rights to receive current rent before bankruptcy or to compel post-petition rent payment or obtain relief from stay to repossess premises
    3. Security deposit setoffs and draws on letters of credit
    4. Get appointed to creditors' committee
    5. Strategies when beginning a lease

Benefits

The panel will review these and other key questions:

  • What trends are developing in commercial tenant leases as a result of the current economic crisis?
  • What provisions should landlords consider in negotiating and drafting leases or lease modifications to protect against potential losses due to tenant bankruptcy?
  • What rights does the Bankruptcy Code give commercial landlords and tenants?
  • What are the best and most cost-effective practices for a commercial landlord to pursue when a tenant files for bankruptcy protection?

Faculty

Riela, Michael
Michael J. Riela

Partner
Tannenbaum Helpern Syracuse & Hirschtritt

With more than 15 years of experience, Mr. Riela advises companies on complex restructuring, distressed M&A, loan...  |  Read More

Webb, A.J.
A.J. Webb

Attorney
Frost Brown Todd

Mr. Webb counsels companies facing varying degrees of financial uncertainty and distress, working to proactively...  |  Read More

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