Landlords beware: You may not be able to rely on all the remedies found in your lease if your tenant files bankruptcy. For example, the bankruptcy section of your lease may provide that the tenant filing a bankruptcy petition constitutes an event of default. But, in reality, provisions like this are often unenforceable under the Bankruptcy Code.
Section 365 of the Bankruptcy Code sets out the basic rights and responsibilities of landlords and tenants in bankruptcy. Equipped with a working knowledge of these provisions (and a capable bankruptcy attorney), a landlord faced with a tenant bankruptcy can know what to expect in the initial stages of a tenant’s bankruptcy case and develop strategies to reduce the uncertainties involved in the bankruptcy process.
Read Article: www.natlawreview.com/article/landlord-rights-and-responsibilities-commercial-tenant-bankruptcies