Law360 published an article written by Associate Dormie Ko, Member Geoffrey Smith, and Of Counsel Timothy McKeon about how landlords often find themselves in disputes with debtor-tenants over damages resulting from companies using the bankruptcy process to reject unwanted leases. Given the significant increase in corporate bankruptcy filings in recent years, the authors outline what landlords should consider if their leases are rejected in bankruptcy.

The attorneys write, "As more companies seek to use the Bankruptcy Code as a means of righting the ship, landlords can expect that debtor-tenants will use the Bankruptcy Code to reject leases and cap the resulting damages. The application of Section 502(b)(6), however, can be complicated and requires careful analysis of the underlying lease, the landlord-tenant relationship and the laws of the applicable jurisdiction."

Source

Law360